Payment protection in the spotlight
- 6TH JUNE 2007
Payment protection insurance (PPI) is taken out in order to safeguard the monthly repayments on loans, credit cards or mortgages if the policy holder should suddenly find themselves out of work due to accident, unemployment or sickness. A policy will usually pay out for up to 12 months and is considered a safety net on which to fall. However, it has been in the spotlight recently and for all the wrong reasons.
The sector is currently being reviewed by the Competition Commission and although there have been some improvements made in the sector already following recommendations by the Financial Services Authority, there clearly needs to be many more made.
One of the biggest faults the Financial Services Authority have highlighted is the fact that the sector needs to be more transparent.
This is one of the biggest problems in the sector, with the majority of consumers buying what they clearly don’t understand and in many cases they have been mis-sold a policy, in order for the banks to make huge yearly profits.
There are many exclusions hidden in policies and people simply aren’t aware of these and the banks certainly don’t point them out. Consumers have found that they have paid premiums for years’ on a policy only to find they aren’t eligible to claim on it when they need to. This has led to what some say will end up being tens of thousands of pounds worth of compensation claims.
The other problem which clearly needs attention is the fact that banks charge extremely high premiums for their policies, which are often useless to those who have purchased them.
If you want peace of mind while it not costing a fortune then talk with British Insurance, they are an independent payment protection specialist who solely deal in quality insurance products. British Insurance can cut the cost of payment protection premiums typically by more than half which means that while you make savings you also have peace of mind for the future.
