The six billion pound scam
- 21ST MAY 2007
To add to it`s arsenal of names, the payment protection insurance (PPI) sector has recently been called “The six billion pound bank scam”. The sector has earned this label due to wide mis-selling of the product that has recently come to light and which is set to cost the unscrupulous banks and lenders who have ripped off their customers with over priced and often unsuitable cover billions in compensation.
Payment protection insurance is private insurance that you can purchase when you can take out a loan, mortgage or credit card or at a later date. However many banks “force” the consumer to take the protection alongside their loan or other borrowing rather than giving them the opportunity of shopping around.
In fact, many people often have the cove and are paying extortionate premiums for them without actually realising that they have the cover. They believe that it is part of their monthly loan repayment or part of their credit card balance!
We all know how essential it is to have insurance, and payment protection insurance is the third most widely bought insurance. However unlike home and car insurance where companies offer competitive rates, some companies charge as much as they can for payment protection policies.
Payment protection insurance isn’t all bad if you shop around and purchase your policy from an ethical and honest provider such as British Insurance. Simon Burgess from the company speaks openly about the banks and lenders and how they rip-off the consumer by having an 80% stranglehold on the sector.
Fortunately things could change with the Financial Services Authority intervening and now the Competition Commission currently reviewing the sector. Until light is shed on the sector and hopefully it is opened up, stick with British insurance who sell quality products for the cheapest premiums.
