↑ Grab this Headline Animator

PPI continues to be sold through stealth says Burgess

Feedback from the Financial Ombudsman Service (FOS) indicates lenders are continuing to ignore calls to treat customers fairly when selling Payment Protection Insurance (http://www.britishinsurance.com), says PPI lobbyist Sara-Ann Burgess from independent provider, Burgesses.

According to the FOS the top three causes of complaint are;

1. Customers have a policy they don'st want. They either thought the cover was automatically part of the loan agreement or were led to believe they couldn'st take out a loan without PPI.

2. Customers are unable to claim. Exclusions apply because of the state of their health, their job (ie seasonal worker or on a contract) or age.

3. The cost of the policy wasn'st explained.

Payment Protection Insurance provides a monthly income should the policyholder lose their job, become sick or have an accident.

Sara-Ann comments: Despite widespread condemnation of lenders's unscrupulous selling tactics, consumers continue to be conned into purchasing expensive and often unnecessary policies. Implementation of the Competition Commission'ss recent rulings outlawing this 'sselling through stealth's cannot come quick enough.

Complaints to the Ombudsman soared in the period from 1 April to 30 September this year with 13,119 PPI cases already registered. This is well ahead of the 10,652 received for the previous financial year, explains Sara-Ann. What'ss so worrying is that figures are continuing to rise despite PPI providers assuring regulators they are 'streating customers fairly's. It'ss more like treating themselves to customers's money.

Another common grievance is the level of single premium refund offered to customers who pay their loan off early. It'ss shameful, continues Sara-Ann. Day after day we'sre hearing cases where cash-strapped consumers are being ripped off by High Street banks and building societies - institutions that supposedly built their reputation on trust are clearly abusing this.

Recent FOS case studies include a couple in financial difficulties who took out a succession of loans and were sold single premium PPI policies with each loan. The Competition Commission has called for the sale of single premium policies to be banned as consumers end up paying interest on both their loan and the premium.

Having realised their initial loan wasn'st enough to manage their debts, the couple approached another lender who offered a new loan for a higher amount. This allowed them to settle the existing loan, clear an overdraft on a current account and pay off several credit card and other bills. To keep their repayments low, the couple opted for a 10 year loan. Unfortunately, they still had financial difficulties and within 18 months approached their lender for more help. The lender agreed a new higher loan, spread over 15 years.

When they realised PPI was included in all the previous loans, the couple asked for a premium refund, but was offered a paltry settlement. When the FOS stepped in, it was found that not only were the couple paying interest on PPI for the entire lifetime of each loan, but that the PPI cover only lasted five years, well below the length of their agreed repayment periods.

The FOS berated the lender for encouraging the couple to buy the policies, citing the sale as inappropriate, in light of the couple'ss financial circumstances, and asked the lender to pay back the amount the couple had paid on the policies, with interest.

Sara-Ann concludes: This is taking advantage - the couple were repeatedly paying for PPI which would only cover them for 5 years. Whilst you probably wouldn'st be granted loans of this nature now, it evidences just how immoral lenders are - knowing a couple are in financial difficulty and piling up more debt for them. Irresponsible lending like this has contributed to the current economic crisis.

Consumers must borrow responsibly and question everything, especially the exclusions and small print. PPI isn'st a condition of the loan - policies can be purchased independently from providers offering more competitive and wide-ranging cover.

Independent firm British Insurance (http://www.britishinsurance.com) recently scooped a series of awards from magazines and websites for its products and excellence in service and treating customers fairly.

↑ Grab this Headline Animator

---

This article has been robotically scanned and tagged by Prnewsnow with the following search tags. No human manipulation of these tags take place.
| Usbid | Iso 9001 | quality management system |

---

4908 readers online...

, Local News