How widespread is the rip-off?
- 18TH MAY 2007
Did you realise that when you go for a loan the quote you are given for the repayments could include payment protection insurance (PPI)? Not many people do and this is the reason that they are getting ripped off by the banks and building societies.
In a recent survey by consumer watchdog Which? where mystery shoppers applied online and over the telephone for cover - it was found that 24 out of the 41 firms investigated automatically included the protection alongside the loan.
Payment protection insurance is undoubtedly a good thing. However what many consumers are unaware of is that it doesn’t have to be bought alongside the loan or credit card, it can be purchased independently. It is also not compulsory.
Banks and lenders are cashing in on their clients by automatically including the costs of insurance within their loan or credit card quote and, in many cases, not even advising them.
The rip-off therefore seems to be more widespread than anyone ever realised, as it is thought that over 20 million policies exist in the UK. Around 80% of these have been taken alongside loans and credit cards which means that there are a huge amount that of over priced and unsuitable policies in existence, thanks to the greedy banks and lenders.
Simon Burgess from specialist payment protection insurance provider British Insurance says that: “When applying for credit, always ask whether the cost of payment protection insurance has been included within the credit quote. It is your right to shop around and buy the over independently and you should never feel forced in to buying it from your credit provider.”
