Many consumers duped into purchasing PPI
Over recent months there has been a great deal of controversy relating to Payment Protection Insurance, otherwise known simply as PPI. Campaigners and even regulators in the UK have stated that these PPI policies are often being mis-sold, and are pushed onto those that cannot even benefit from them in many cases. Consumers have been made to feel that they have to take out PPI when taking out credit, which is not the case, and many consumers were under the impression that if they wanted to protect their repayments that had to take out PPI from the company through which they were taking credit, which again is not the case.
The consumer group Which? has recently carried out a survey that indicated that many UK consumers taking out credit may still be getting duped into taking out this type of cover, whether they want it or not. Which? carried out a mystery shopping exercise in order to determine how PPI was being sold, and whether it was being sold appropriately and to the right people. According to the results, in many cases PPI was simply added on to the cost of the finance without the consumer being informed about it, and in other cases consumers were not told that they had a choice of whether or not to take out the cover.
Well over fifty percent of the companies that were evaluated as part of the mystery shopping exercise simply added PPI on to the quote on a loan or credit, without informing the consumer that this was being done. This included popular lenders such as Natwest and RBS. However, there were also some lenders that provided two quotes to the consumer, one of which had PPI added and the other without PPI, giving the consumer the choice of whether they wanted to pay the increased amount for the benefit of protection on their repayments.
Although PPI can be a good idea to safeguard repayments, it is important that the consumer checks the small print thoroughly before committing to a policy to ensure that they can benefit from the protection. This is because certain restrictions or exclusions could result in certain consumers being unable to make a claim.
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