Bad reputation damages sales
- 8TH JUNE 2007
The sales of payment protection insurance (PPI) have taken a beating recently due to the ongoing independent investigations into the sector and claims that the product is grossly overpriced and has been mis-sold in a huge amount of cases.
Following a Super Complaint from the Citizens Advice, the Office of Far Trading referred the sector to the Competition Commission. The Financial Services Authority have also been carrying out investigations in to the payment protection insurance sector and each time the same complaints are found.
While the product is aimed at protecting those who take out a loan, credit card or mortgage in a large amount of cases it has fallen way short of its promise and thousands have been “ripped-off”.
The biggest problem regarding the product is that consumers just simply don’t understand it, it isn’t consumer friendly and those selling it don’t explain the product as they clearly should. There are many exclusions within a policy and these are not mentioned at the time the policy is sold, which means that if and when it comes to claiming on the policy many find they can’t.
Along with this the majority of people wishing to take out a policy are led to believe they have to take it with their loan or credit card from the same place. This is simply not true and is by far the worst place to purchase your policy.
“The biggest culprit when it comes to ripping-off the consumer “says Simon Burgess from independent provider British Insurance “is the banks. The banks make huge profits on payment protection insurance and put these profits ahead of the consumers needs.”
He urges consumers to shop around for their cover and to fully ensure that they understand what their cover entails.
