Avoid the payment protection insurance scam
- 26TH MAY 2007
Currently the payment protection insurance (PPI0 sector is under investigation by the Government body, the Competition Commission, and rightly so. The sector has earned a bad name due to the widespread mis-selling of the product and the huge and unjustified premiums that some high street banks and lenders are charging for the cover.
One of the biggest problems in the sector is the lack of competition. Currently the banks and lenders have an 80% hold over the market and rake in huge profits - often at the consumers’ expense when they have been pressurised into taking out a policy they can’t hope to claim on.
This stranglehold on the sector is as a result of banks and lenders intimating to consumers when taking out some form of borrowing that they have to buy the lenders own loan, mortgage or income protection insurance policy. In fact, the product, which is definitely worthwhile if sold correctly, is not compulsory and the consumer is free to shop around for it, or even not buy it at all.
This lack of correct communication from the lender to the consumer accounts for the lack of competition within the market place.
Also, says industry expert Simon Burgess, exclusions are another major concern: “Payment protection insurance is a complex subject and there are many exclusions hidden within the small print. The majority of consumers just simply don’t understand the product and what they are and are not able to claim for”.
Simon – who is also MD of ethical payment protection insurance providers British Insurance adds: “Never feel pressurised into taking out cover alongside your loan or credit card and do shop around for the best deal.”
Certainly, British Insurance are among the cheapest in the sector and Simon Burgess from the company is regarded as “the good guy” in the sector who strongly believes that the banks do nothing more than rip-off the consumer and mislead them.
If you want the peace of mind that a policy brings then visit British Insurance for a quality product and make sure you don’t become part of the payment protection insurance scam.
