Protecting your finance
Competition Commission decision sounds the death knell for PPI, says Which?
As the Competition Commission announces its recommendations into the PPI market, Louise Hanson, Head of Campaigns at Which? says:
“This decision helps sound the death knell for PPI. For too long too many consumers have suffered from shoddy, expensive and inadequate protection. It’s a great shame that since we began campaigning for better products, many people have wasted millions of pounds on PPI and have been ripped off in the process.
“Industry shouldn’t wait until 2010 to get their house in order and the FSA should make them act sooner. Last week five major lenders* said they’d pull out of the single premium market by the end of January. PPI has been thoroughly investigated for years and everyone knows its failings, so what’s the industry waiting for?
“We’re finally seeing the light at the end of this very long tunnel but it’s now time for the industry to develop useful products that consumers actually need to protect their finances.”
Go to www.which.co.uk/ppi for information on how to make a claim if you think you were mis-sold and template letters to send to your provider.
* On the 20 January 2009 the FSA announced that Alliance & Leicester, Barclays, The Co-operative Bank, Lloyds banking group (including Lloyds TSB, Halifax and Bank of Scotland) and RBS/Natwest were pulling out of the single premium PPI market for unsecured personal loans
Some of the key decisions from the Commission:
· Banning the sale of single premium policies
· Prohibiting the sale of PPI by the credit provider within 7 days of the sale of the credit
· Credit providers have to give consumers a personal PPI quote which states the cost of the insurance on its own and when added to the credit product
· Banning the sale of single premium policies
· Prohibiting the sale of PPI by the credit provider within 7 days of the sale of the credit
· Credit providers have to give consumers a personal PPI quote which states the cost of the insurance on its own and when added to the credit product
· The provision of an annual statement to all PPI customers reminding them that they can cancel the policy. The statement has to be sent separately from the credit statement
· Solutions for making advertising clearer
· Obligatory information provision to the FSA for publication in their PPI comparison tables and on annual GWP (Gross Written Premium) and claims ratios to the OFT
· Obligatory information provision to the FSA for publication in their PPI comparison tables and on annual GWP (Gross Written Premium) and claims ratios to the OFT
Information on PPI
· PPI can be ridiculously expensive. For example, adding PPI to a £7,500 five-year loan could cost an additional £2000-£3000.
· PPI can be ridiculously expensive. For example, adding PPI to a £7,500 five-year loan could cost an additional £2000-£3000.
· PPI only pays out for a limited amount of time, usually 12 months, although some policies offer a 24 month pay-out period.
· Credit and store card PPI sometimes covers only the minimum amount that must be paid each month.
· When sold alongside loans or finance agreements, PPI is currently sold as a ‘single premium policy’, which means a lump sum covering the cost of the insurance is added to the amount you have borrowed, so you end up paying interest on both the insurance premium and the loan.
· When sold alongside loans or finance agreements, PPI is currently sold as a ‘single premium policy’, which means a lump sum covering the cost of the insurance is added to the amount you have borrowed, so you end up paying interest on both the insurance premium and the loan.
· PPI policies last for just five years, so if your loan or finance agreement is for longer than this, you’ll still be paying interest on a policy that has long since expired.
What Which? has done:
Since the late 1990s, Which? has been calling for changes to the PPI market. Over the years our research has shown that PPI is often mis-sold, which is why we’ve launched our campaign to help consumers gain the compensation they deserve. In July 2008 Which? gave evidence to the Competition Commission as part of their enquiry into the PPI market.
Since the late 1990s, Which? has been calling for changes to the PPI market. Over the years our research has shown that PPI is often mis-sold, which is why we’ve launched our campaign to help consumers gain the compensation they deserve. In July 2008 Which? gave evidence to the Competition Commission as part of their enquiry into the PPI market.
You can now claim for mis sold PPI on Facebook using Payback the application from Which? - search for Payback on Facebook for information on how to make a claim and a template letter to send to your PPI provider. http://en-gb.facebook.com/apps/application.php?id=13287817862
What Which? called for:
· Which? welcomed the provisional decisions of the Competition Commission in November 2008, which included a ban on single premium PPI and splitting the sale of the credit product and PPI
· Which? welcomed the provisional decisions of the Competition Commission in November 2008, which included a ban on single premium PPI and splitting the sale of the credit product and PPI
· As with other insurance products, we want people to pay regular premiums and not a single payment which is charged interest
· Transparent pricing
· Regulators to step up their enforcement action against rogue firms
· Clearer information on product features and exclusions
· Regulators to step up their enforcement action against rogue firms
· Clearer information on product features and exclusions
In these difficult times Which? urges everyone to think about how to protect their finances and shop around for the best deal that meets their needs.
-
| 14 August 2008 | Are you up against the glass ceiling? |
| 04 November 2008 | Check out a better deal at the supermarket |
| 13 January 2009 | The page that saves you money |
