Customers Do Pay Over the Odds For Payment Protection Insurance - By: Jonathan Walker - Big Blue Tomato

If you are an unlucky soul that has taken out PPI (payment protection insurance) through the financial institution that you took your borrowing with, then the chances are that you are paying far too much. There is a survey that is currently being conducted by the Competition Commission, and they reckon that the banks are taking consumers for a ride with this one, just like the bank charges saga.

It is through a purposefully orchestrated communication breakdown that consumers are not being made aware by the banks that they can get far more competitive deals for the same product if they shop around. The banks make out that customers have to take out PPI alongside their borrowing, and this simply is not the case.

The market for payment protection insurance is worth somewhere in the region of 1.4billion pounds. The size of this figure comes as no surprise if you take into account the fact that the deals being offered by the banks are absurd. Stand alone PPI is usually the far better option. It amounts to around three pounds for every hundred pounds worth of borrowing that is insured. If you are to get PPI attached to your borrowing then it is more likely to set you back twenty eight pounds for every hundred. This is staggering.

As well as making PPI prices unbelievably high, Some of these financial institutions will knowingly sell PPI to people that cannot make a claim if they need to, which is unbelievably awful. There are loads of mitigating circumstances written into PPI policies that are designed to make it really difficult to make a claim. As this is the case, it is important that anyone considering taking out PPI has a really good look at the product they are purchasing, and understands implicitly what the rules and regulations of the policy are. You really need to be reading the small print. If you are going to sign for something called premium PPI, then you need to be even more careful, because premium PPI gets attached to a loan and you therefore have to pay interest on top of however much the PPI cost you in the first place.

Because of the massive amounts of people that have been contacting the Citizens Advice Bureau, in regard to the poor way that PPI has been sold to them, and the way that it is jeopardising their finances, a complaint of considerable magnitude has been made to the Office of Fair Trading. It was around this time that the Competition Commission got involved, and looked into the market. The report that they have been working on for the best part of two months is due to be completed soon, and it is expected to have some reasonable recommendations that will work in the favour of the consumer. It is likely that a temporary limit is going to be introduced, so that banks can only charge a certain amount for PPI. Another likely suggestion is that the companies that lend money will be made to tell the consumers that they do not have to take PPI with borrowing, and that if they shop around they will be able to obtain it in a drastically deflated cost. It may also be the case that the financial institutions will be forced to put the price of their PPI policies within their advertising. If all of these devices are implemented, then the market should become one that is far more consumer friendly, and obviously one that is far cheaper.

About the Author

This article is written by Jonathan L Walker, on behalf of Claims Management UK, specialising in helping people with their Mis-Sold PPI

Article Directory Source: http://www.articlerich.com/profile/Jonathan-Walker---Big-Blue-Tomato/36935

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