People still being mis-sold payment protection insurance

| May 29, 2008 | 0 Comments

A report, which is due to be published next month, reveals that 2 million customers have been sold potentially worthless payment protection insurance (PPI).

The policies cover monthly payments for goods, services or loans during illness and redundancy.

Over the last 5 years, 6 million have signed up for the deals but the Office of Fair Trading, the Competition Commission and Which? say they have found evidence of massive mis-selling.

One example is pensioners being sold the insurance even though they have no income to protect and, therefore, would be unable to claim.

According to many experts, the policies are said to be mired in small print and are very difficult for customers to make a claim.

Figures show that banks and retailers, including those selling finance on cars, store cards and furniture, make £5.5 billion in income a year from the policies.

Doug Taylor of consumer group, Which?, said they have always been aware that consumers are being mis-sold payment protection, but was amazed to discover the scale of it.

Companies found guilty of mis-selling payment protection have received huge fines from the Financial Services Authority

A spokesperson for the British Bankers’ Association insisted that PPI provides borrowers with a plan B if their circumstances change.

If they lose their jobs or become ill, their commitments can still be met, so it’s important that people are not discouraged from taking it out, concluded the spokesperson.

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