Growing concerns over PPI sales
Amidst growing concerns about the sale of payment protection insurance by loan and card companies, consumers in the UK are being warned not to assume that they have to take out protection with the lender through which they are borrowing, and instead to shop around and find a policy that suits their needs and their budget. Many are concerned that lenders are talking borrowers into taking out payment protection insurance that in some cases is not even appropriate for the needs of the borrower.
Over recent months a number of MPs have expressed their concerns over this matter, and even the Financial Services Authority has agreed that the PPI plans that lenders try to sell to borrowers are often inappropriate and not in the best interest of the borrower. The Office of Fair Trading has added its own concerns with regards to the matter, and has stated that many consumers are getting a raw deal with this type of cover because lenders are selling them products that simply are not suited to their needs.
Consumers are urged to remember that there is no obligation to take out payment protection insurance with loan products offered by lenders. However, for those that want the peace of mind that comes with payment protection insurance it is a good idea to shop around and find a policy that fits in with their needs and their pocket rather than agreeing to take out the insurance offered by the lender without question.
One concerned MP stated: 'Doesn't it come back to the business model, where there's a lot of hidden stuff going on and people who are selling these very dodgy products are actually on huge commissions and they're basically ripping off customers?' The FSA has added that although PPI can prove valuable to consumers borrowers need to be more informed about this type of cover.
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