PPI industry referred to watchdog
Following the recent controversy over the payment protection insurance industry (PPI) the Office of Fair Trading has now announced that it will be referring the investigation into the payment protection insurance industry to the leading watchdog, the Competition Commission.
The move comes after a period of consultation where the Office of Fair Trading assessed and considered responses from a variety of businesses, trade bodies, and consumer groups, and concluded that competition concerns that had been raised earlier were still a concern that needed to be addressed.
Payment protection insurance has been under fire since last year when concerns were raised with regards to the suitability of the protection that was being sold to consumers as well as over the way that the insurance was being sold, with many stating that the cover was being mis-represented and mis-sold by many lenders. In some cases, according to the Office of Fair Trading, PPI was even being included in quotes and on financial packages without the knowledge of the borrower.
Other concerns that were raised over the sale of PPI included consumers being told that taking out PPI could improve their chances of getting the finance that they wanted, consumers being given little or no information with regards to whether they could even benefit from PPI, and the hard sell approach that many lenders and companies were using to get consumers to take out PPI when they were borrowing money or taking out credit.
John Fingleton, chief executive of the Office of Fair Trading stated: 'Our examination of the evidence presented to date gives us reasonable grounds to suspect that there are features of this market which restrict competition to the detriment of consumers. Despite some evidence of a degree of consumer satisfaction with aspects of the product, the evidence as a whole suggests consumers get a poor deal. This referral will enable the Competition Commission to undertake a thorough investigation of the market and, if necessary, ensure that appropriate remedies are put in place.'
Richard Smith
12th February 2007
More Information:
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If you have taken out a loan and now decide to pay it back before the loan complettion date you may be forced to pay and early redemption penalty, normally around 2 months interest. However, are these just another money making exercise to fleece you of you cash? Read on to find out more.
If you have payment protection on any personal loans that you may have made, did you know that you could be paying upwards of £2000 on top of the original debt including the interest?
Article relating to loan fees and loan penalties for loans in the UK. Includes information about arrangement fees, loan insurance, loan transfer costs and early redemption penalties
External Links:
- Citizens Advice urges swifter action on PPI
National charity Citizens Advice has urged swifter action in response to today’s publication of the Financial Services Authority (FSA) review into payment protection insurance (PPI), to do more to protect consumers.
