Fairinvestment.co.uk welcomes new rules on payment protection insurance

23 July 2009 / by Rachael Stiles

Fairinvestment.co.uk has welcomed the new measures being introduced in the payment protection insurance market, which it is hoped will prevent incidents of mis-sold PPI, but this kind of protection can still offer financial security, says the comparison website.

The Competition Commission has recently laid out plans for implementing measures it announced in January for the payment protection insurance sector, such as preventing it being sold at the same time as the product, and for the following seven days, and banning the sale of single-premium PPI.

Commenting on the new measures, Julie Smith, spokesperson at Fairinvestment.co.uk, said:

"The changes in the payment protection insurance industry add up to great news for the consumer. Single premium PPI can make borrowing much more expensive, because the cost of the insurance is added to the total amount borrowed and accrues interest accordingly. This is particularly relevant if the loan is paid off early, as the full cost of the PPI has to be paid irrespective of how long the loan was actually in force.  

"With lenders not being allowed to sell PPI to customers at the time of sale, or in the following seven days, consumers will have some breathing room, to compare other policies on the market and make an informed decision, not one based on pressure from the provider to sign up on the spot. 

"It is worth remembering that while there have been many cases of mis-sold PPI, which have led to consumers claiming back thousands of pounds, it can, in some situations, offer consumers valuable protection. For example, if they suddenly find themselves unable to work due to illness or injury, or are suddenly made redundant, which in today's economic climate is becoming a reality for thousands of people. 

"Good quality payment protection insurance can help consumers to keep up with the repayments on their debts, such as mortgages, credit cards, or loans, preventing them from falling into arrears, or facing late payment fees, offering a financial safety net when they need it most."

Simon Burgess, chief executive of British Insurance – a multi-award winning provider of PPI which works with Fairinvestment.co.uk – believes that the payment protection insurance industry has been a "dysfunctional market which has been working to the detriment of consumers."

He therefore welcomes any measures the Competition Commission introduces which might improve the way in which the PPI market operates in favour of the customer.

Consumers can use the free payment protection insurance quotes service offered by British Insurance through Fairinvestment.co.uk to find the best cover for their needs at competitive prices.

About Fair Investment
• www.fairinvestment.co.uk, is an independent online finance portal, providing comparison tools, news, reviews and information on a wide range of financial products and services, including insurance, credit cards, mortgages, loans, savings and investments.
• Fair Investment Company is a leading internet player that sees 400,000 unique users per month, sells over £5 billion worth of mortgage enquiries and is a Hitwise 100 Banks and Financial Institutions site.

For further information, contact:
Rachael Stiles
Online Personal Finance Editor
Fair Investment Company
Telephone: 0117 9335507
Fax: 0117 9335509
E-mail: rachaels@fairinvestment.co.uk
Web: www.fairinvestment.co.uk