Payment Protection Insurance misery not over yet

Andrew Hagger, Head of News and Press comments on today’s announcement on the PPI market by the OFT:

“Whilst it must be seen as a positive step that the OFT intends to refer the UK payment protection to the Competition Commission, it is likely to be many months before changes are introduced to give the consumer a fairer deal.

“To save customers having to pay ‘over the odds’ by purchasing this cover from their lender at the ‘point of sale’, it needs to be made clear that similar cover is available from standalone providers with the following benefits:

• No interest is payable on your premiums

 

• You don’t have to pay the total premium up front

• If you cancel the policy early, you are not penalised by the premium rebate calculation used by lenders.

 

“Lenders make substantial profits from the way these products are currently sold and as a result are unlikely to offer a cheaper solution until their hand is forced. However if other lenders were brave enough to make a stand now and come out with standalone PPI like the recent product launched by the Post Office, they have the chance to steal a march on their competitors.

“The likes of Paymentcare.co.uk and BritishInsurance.com offer similar cover to mainstream lenders at a much reduced cost to the customer, without charging interest on top, or hitting them further in the pocket with poor value rebates on cancellation.

“Whilst these standalone providers offer far greater value for money, they are hampered by the fact they don’t have the massive benefit of ‘point of sale’ presence and that very few people are still aware that they exist.

“I’m hopeful that the Competition Commission will take action to ensure the consumer obtains better value for money, but this is not going to happen overnight.

“In the meantime many customers are still going to be getting a poor deal from their lender”

NOTES TO EDITORS:

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry. 

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Please call Andrew Hagger on 0870 2250 512 for further information

 

 

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