Consumers must not tarnish protection providers with the same brush, there are those out there who do ensure an informed decision is made before purchase and they clearly explain the cost, what the policy covers, its benefits, terms & conditions and exclusions. They also offer comprehensive cover at a fraction of the premium charged by banks and building societies.
Braintree, Essex (PRWEB) October 10, 2008
As consumer confidence in banks and building societies continues to diminish, one High Street lender - Alliance and Leicester - has dented its reputation with a £7million fine from the Financial Services Authority for Payment Protection Insurance mis-selling.
PPI lobbyist Sara-Ann Burgess from Burgesses comments: "I've always recommended that consumers looking to purchase PPI as a financial safety net against accident, sickness or unemployment would do well to source their cover from independent specialist firms.
"High Street lenders have repeatedly been accused by the Citizens Advice Bureau and Office of Fair Trading of hiking up premiums and pressurised/inappropriate selling and the Competition Commission continues to investigate them. This latest FSA penalty serves as reminder that those who mis-sell PPI will be fined. It's a shameful practice and worrying for consumers who may have unwittingly purchased inappropriate products and shelled out thousands of pounds over the years."
From January 2005 to December 2007, Alliance & Leicester sold around 210,000 policies to customers seeking personal loans, at an average price of £1,265. The FSA reports there was a general failure of advisers to give customers details of the cost of PPI, they didn't make it sufficiently clear that PPI was optional and staff put pressure on customers who queried the inclusion of PPI in their quotes or challenged advisers' recommendations.
In addition, the lender sought to find reasons to sell PPI without properly considering customers needs. Sara-Ann continues: "Consumers must not tarnish protection providers with the same brush, there are those out there who do ensure an informed decision is made before purchase and they clearly explain the cost, what the policy covers, its benefits, terms & conditions and exclusions. They also offer comprehensive cover at a fraction of the premium charged by banks and building societies."
Independent PPI provider Safety First is an example of this, having recently launched a low-cost loan payment protection product. Cover starts at £1.90 per £100 of monthly benefit for accident and sickness cover, £3.40 per £100 for unemployment and £3.90 for all three. In comparison, the Royal Bank of Scotland charges £40 per £100 of benefit for accident, sickness and unemployment cover, 10 times more than Safety First.
Safety First also provides a 'back to work' support service helping claimants with job seeking, CV preparation and interview techniques, plus access to a job vacancy database that's updated daily .
Sara-Ann concludes: "The credit crunch is not the only reason consumers are losing confidence in their banks and building societies - trust is fading because of PPI mis-selling. However, I urge consumers not to turn their backs on this valuable cover, specialist providers are working to rebuild trust with a range of well-priced products that will repay debts in the event of interrupted income, plus ensure access to support services to help get you back on your feet."