Time for unfair single premium PPI to be scrapped, says Paymentcare.co.uk
The decision by several major lenders to pull out of selling single premium payment protection (PPI) insurance with unsecured personal loans by the end of this month (Jan ’09) has been welcomed by the UK’s leading independent PPI provider Paymentcare.co.uk (www.paymentcare.co.uk).
Barclays, The Co-Operative Bank, Lloyds Banking Group and RBS/Natwest have this week announced they are to stop selling consumers one off PPI cover on loans, and now other major lenders are expected to follow suit.
“We have long campaigned for this very expensive and frankly unfair way of levying PPI premiums to be scrapped,” said Paymentcare.co.uk’s Shane Craig.
“It could be that some of these lenders are dumping their controversial single premium models ahead of the probe into the way PPI is sold by the Competitions Commission,” he added.
The results of the CC investigation are due to be announced next month (February).
And Paymentcare.co.uk also endorses the FSA’s comments, that a number of these providers now offer – or plan to offer ‘regular premium PPI’, instead of a single premium product.
“It will be interesting to see which lenders will take these developments on board and dump their single premium product with a view to switching to regular monthly premiums,” he added.
The FSA said that, while it acknowledges the fundamental importance of appropriate protection insurance in the current economic climate, it ‘remains concerned over the standard of sales of single premium PPI.’ *
“A PPI product can be helpful for customers wanting protection on a specific credit agreement, as long as the policy is sold appropriately,” said an FSA spokesman.
Shane Craig also welcomed comments from the Which? head of campaigns, Louise Hanson, who said that ‘the party is over for single premium PPI.’
“Which? has adopted a similar line to us, taking the view that the single premium model is fundamentally poor value for consumers. Like them, we believe it should be withdrawn from the market altogether,” added Craig.
