PPI still being mis-sold to millions
June 10, 2008
Over the past couple of years there has been a major crackdown on the sale of Payment Protection Insurance to consumers that were not suited to the plans. However, according to consumer campaign officials and watchdogs, there is still evidence of large scale mis-selling of this type of cover to millions of people that can never actually claim on the insurance, and are therefore wasting their time.
Campaigners and consumers groups have estimated that around two million consumers may be paying for payment protection insurance cover on which they can never make a claim because the cover is not suitable for them. This even includes pensions that have no income to protect and therefore cannot claim on the cover. It is thought that around six million consumers have taken out such cover over the past five years, and that this means that a third have cover that they cannot claim on.
It is also thought that banks are making around £1.5 billion a year from this type of cover. Whilst there has been a major crackdown on the mis-selling of this type of cover the Office of Fair Trading, the Competition Commission, and the consumer campaign group Which? claim that the scale of the problem is still huge.
One official from Which? recently stated: ‘We’ve always known that people were being mis-sold payment protection, but we were still amazed to discover the scale of it. It appears that salespeople are chasing their commissions, their bosses are chasing profits - where’s the sense of responsibility to the customer?’
However, the British Banker’s Association insists that this cover is invaluable to many, stating: ‘PPI provides borrowers with a plan B if their circumstances change. If they lose their jobs or become ill, their commitments can still be met, so it’s important that people are not discouraged from taking it out.’
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