| The Competition Commission has today released a | | | | these could be victims of mis-selling. Of great concern |
| damming report following its investigation into the | | | | is the fact that in many cases it is the vulnerable, low |
| Payment Protection Insurance (PPI) market. | | | | and low to middle income earners who are affected. |
| | | | | |
| The Competition Commission said in its summary; we | | | | “Firstly it’s expensive and can add over |
| provisionally found that each credit provider and | | | | £2000 to the cost of an £8,000 loan. Secondly, in |
| financial intermediary faces little competition for the | | | | many cases the policies are simply not suitable. Many |
| sale of Payment Protection Insurance (PPI) when it is | | | | people have already tried to claim against their policy |
| sold in combination with the credit it insures. As a | | | | only for it to be rejected due to exclusions or the |
| result of this lack of competition, it is highly profitable | | | | small print. The PPI providers, who include banks and |
| to distribute PPI. We estimated that the 12 largest | | | | loan companies, had a duty to check suitability at the |
| distributors of PPI made profits in excess of the cost | | | | time of selling the policy but in many cases this just |
| of £1.4 billion in 2006. We found that there were | | | | didn’t happen. What’s worse is that in some |
| features of relevant markets which resulted in | | | | cases customers have been pressurised into taking |
| consumers facing higher prices and less choice. Not | | | | PPI, believing that it would improve their chances of |
| only was the matter of competition a factor in this | | | | getting a loan.” |
| investigation but the Citizens Advice Bureau issued a | | | | |
| super-complaint which highlighted not only consumers | | | | If you have a loan, mortgage or credit card, it is |
| paying excessively high prices for PPI but that | | | | imperative that you check whether you are paying |
| consumers were also often mis-sold PPI by | | | | for PPI and, if you are, whether the policy is suitable |
| companies using pressure and unfair sales tactics. The | | | | for your particular needs. If the policy is not suitable, |
| specific issues raised by the Citizens Advice Bureau in | | | | you should question why that is. Were you given all |
| its super-complaint were varied. Its four primary | | | | of the relevant information when you bought the |
| areas of concern which the OFT considered were: | | | | policy? |
| | | | | |
| - consumers paid excessively high prices for PPI; | | | | “Anybody considering a compensation claim must |
| - the protection consumers bought was only partial, | | | | establish what the grounds are as these vary from |
| and many policies unreasonably excluded common | | | | case to case”. If you are unsure of what the |
| causes for default; | | | | grounds are and how the regulations apply, you can |
| - consumers were often mis-sold PPI using pressure | | | | contact Anglia Credit Issues. If it is established that |
| and unfair sales tactics; | | | | you have a case and you do not wish to represent |
| - and the administration of PPI claims was slow and | | | | yourself, you can appoint our solicitors who will handle |
| unfair, and often left consumers facing additional | | | | your entire case on a no-win no-fee basis*. And |
| charges or serious debt enforcement action. | | | | considering that it may be costing you somewhere in |
| | | | | between £2000 and £5000, on an unsecured loan |
| Independent experts believe that as many as seven | | | | of £8,000 to £13,000, or even £10,000 to |
| million people may have been mis-sold PPI since 2003. | | | | £12,000 on a secured loan of £25,000 to |
| Over 20 million policies exist in the UK, so there is a | | | | £35,000, it could prove to be an extremely |
| strong chance that many readers will have entered | | | | worthwhile exercise. |
| into one or more PPI’s and up to a third of | | | | |