New concern over TCF highlighted by PPI study

Wed, 23 Apr 2008

Recent research suggests that consumers could be purchasing unsuitable payment protection insurance (PPI) policies because they feel they have no option but to accept their lender’s own policy.

A study, carried out as part of the Competition Commission’s (CC’s) investigation into PPI sales, found that 73 per cent of personal loan PPI and 72 per cent of secured loan PPI consumers, who hadn’t compared policies, thought that they could only be bought from their credit provider .

Shane Craig, of PPI provider Paymentcare, explained that borrowers who buy PPI that is not appropriate to their needs and costs more than a standalone alternative will continue to do so unless the point of sale link between PPI and credit is broken.

He said: "The fact that the majority of borrowers who didn’t shop around for PPI believed that they had no choice but to take their lender’s own policy is clear proof that selling PPI at the same time as the loan is not in customers’ best interests."
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