Customers Do Pay Over The Odds For Payment Protection Insurance

If you have taken out PPI (payment protection insurance) for a loan or a mortgage then there is a good chance that you are being charged too highly for this. There is a report that has been compiled by the Compensation Commission and they have deemed that there is not enough competition in this sector, and as a result the banks seem to be making the figures up as they go along. High, obviously.

Consumers when they are offered this (if they are offered it, as opposed to being made to think that it is compulsory) they are not being told that there are other places that the insurance can be purchased from, for a fraction of the price. The banks make it sound as if you have to have it alongside your borrowing, but this is not the case.

It is a market that is worth 1.4billion to the banks, and with this sort of money being bandied about, they are not likely to want to start making things any more clearer to customers. They obviously do not want to let people know about the independent brokers, that charge on average, £3.00 for every £100.00 covered. This is compared to the average of the financial institutions, who charge £28.00 for every £100.00 covered. This is over nine times more! It is this disgusting abuse of ostensible ignorance that makes the industry so lucrative.

As well as the inflated cost of policies, companies sell PPI to people, knowing that they’re criteria means that they will not be able to make acclaim against they’re policy. PPI covers you for when you are out of a job, should this be due to redundancy or sickness or otherwise. However, the small print in the majority of these policies can often make it really difficult to make a claim if you are subject to certain circumstances. People with mental illness, and the self employed are typical examples of people that struggle to make claims. This is why extreme caution needs to be exercised when buying into such a policy.

Because absolutely loads of people have been contacting the citizens advice bureau, in regards to all of their loan and mortgage repayments and PPI policies, a complaint of colossal magnitude has been presented to the Office of Fair Trading, or OFT. It was at this point that the Competition Commission decided to get involved, and what they did was they got themselves to carry out a survey of the market. During this survey of the market they have been working for 16 months and will not be publishing anything until December. They are expected to come up with a catalogue of recommendations, which will be designed to protect the consumer, and regulate the industry somewhat. It is thought that one of the recommendations will be a temporary limit on how much companies can charge for PPI. One other prospective recommendation is that the companies will have to explain that it is not compulsory to take out payment protection with them, just because it is them that they took the borrowing with. With all of these measures being implemented, the market should become far more of a level playing field. All told the whole industry should benefit from being regulated, and this is inclusive of the customers.

By: Jonathan Walker - Big Blue Tomato

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This article is written by Jonathan L Walker, on behalf of Claims Management UK, specialising in helping people with their Mis-Sold PPI