Consumers are being misled
- 16TH MAY 2007
Consumer watchdog Which? has warned that people who take out loans are still being misled into buying over priced and often unsuitable payment protection insurance (PPI).
A mystery shop of 41 loan providers carried out by the watchdog Which? revealed that over half of them automatically incorporated the cost of loan payment protection insurance cover in with the total cost of the loan.
The fact that is still happening despite recent fines of some large financial corporates by the Financial Service Authority and the ongoing investigation by the Competition Commission is shocking says industry expert Simon Burgess from British Insurance.
“That so many providers are still ripping-off their customers this way is outrageous,” he says, adding that they are flouting the rules and guidelines laid out by the authority that governs them.
“While the FSA has already fined companies such as GE Capital Bank and Capital One for their mis-selling practices, obviously the fines they have received are not enough to shock the other providers in to acting honourably.
“A firmer stance needs to be taken with all those who deliberately mis-lead their customers in order to put a stop to this mass profiteering.”
Burgess urges customers getting a loan to double check that the cost of loan protection insurance hasn’t already been included in the loan quote and to shop around for suitable cover.
“You cannot only find cheaper loan protection cover from an independent provider, but you can also get a policy that is suitable. Many loan companies sell loan protection insurance to their customers who would not even be eligible to claim if they needed to”.
