Moneyfacts.co.uk response to the FSA update on the sale of PPI
Andrew Hagger of moneyfacts.co.uk comments:
"We have all been aware of the shortcomings of PPI products and the associated sales process for longer than we care to remember and are disappointed that it appears that we are really still no further forward.
"If the FSA is aware of the providers that are still failing to treat customers fairly, then why is it not sending a warning message to the rest of the industry by naming the offenders it has identified.
"By entering into a further period of mystery shopping, it means that consumers are still potentially going to be sold unsuitable, overpriced and inflexible products via a flawed sales process.
"Consumers have little faith in the financial services industry as shown by the reaction to the Northern Rock incident, so this lack of action is going to do little to improve the customer perception of our industry.
"It is inevitable that changes need to happen sooner rather than later, so why is the FSA not being more forceful, rather than allowing the institutions to continue to rake in vast profits from the sale of PPI.
"The table below highlights the huge variation in cost between lenders and also shows that you can get this cover at a fifth of the cost from Independent providers."
Figures based on: £10K over 5 years |
|
|
|
|
|
|
MOST EXPENSIVE |
|
|
|
|
|
|
Lender |
APR % |
Monthly Repayment including insurance |
Monthly Repayment excluding insurance |
Monthly Cost of PPI |
Total Cost of PPI |
|
Britannia BS |
6.9 |
£268.82 |
£198.99 |
£69.83 |
£4,189.80 |
|
AA |
6.9 |
£260.06 |
£198.99 |
£61.07 |
£3,664.20 |
|
Intelligent Finance |
7.4 |
£261.19 |
£201.38 |
£59.81 |
£3,588.60 |
|
Sainsbury's Bank |
6.5 |
£253.59 |
£195.01 |
£58.58 |
£3,514.80 |
|
Eskimo Loans |
8.9 |
£263.79 |
£205.61 |
£58.18 |
£3,490.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MOST COMPETITIVE |
|
|
|
|
|
|
Lender |
APR % |
Monthly Repayment including insurance |
Monthly Repayment excluding insurance |
Monthly Cost of PPI |
Total Cost of PPI |
|
8.7 |
£229.10 |
£204.55 |
£24.55 |
£1,473.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXAMPLE OF INDEPENDENT PROVIDER |
|
|
|
|
|
|
|
|
|
|
|
|
|
Paymentcare.co.uk |
Monthly cost of £11 for LASU cover (Life, accident, sickness and unemployment) - total cost for 5 years cover |
|||||
|
at £200 per month = £660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE: Moneyfacts.co.uk - the money search engine |
|
|
|
|||
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.
Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.
Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.
Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600
We normally do not charge a fee for mortgage advice, however this is dependent on your circumstances. Our typical fee would be £349