The future for payment protection insurance
- 18TH MAY 2007
It seems payment protection insurance (PPI) as we know it might be soon changing for the better and not before time. After their recent investigation into the payment protection insurance sector, the Office of Fair Trading passed the investigation into the hands of the Competition Commission. They expect to have concluded their own review of the market by February 2009.
Due to the very public following of the investigation, some light has been shed on the appalling way in which insurance is sold and in a vast amount of cases, has been mis-sold.
One of the major concerns over payment protection insurance was the fact that some companies were charging as much as 80% in commission at the top level, going down to around 20% at the lower end of the scale depending on where you purchased it.
Now the question on everyone’s lips is: will the Competition Commission force companies to bring these charges down?
However while this would be good news in one respect, what effect would it have overall?
If the rates were forced down then the sector would stand to lose around £2 billion. It is thought that by doing this, banks will raise the rates on loans - which we have already seen recently - and put into force charges for having current accounts. So the big question is “What is the future for the payment protection insurance sector?”
Simon Burgess from specialist payment protection provider British Insurance says that “the consumer is often badly misled into thinking they have to take out their policy from their bank or lender, when in fact they can shop around. Greedy companies are making huge profits from their unsuspecting customers and it stinks!”
If you are considering payment protection insurance, always shop around for cover and visit an independent provider such as British Insurance. They sell quality products and are one of the few in the lower end of the profit scale always putting the needs of the consumer first.
