Loan insurance a 'valuable product'

30 September 2009 / by Rachael Stiles

A spokesperson for the British Bankers' Association is concerned that the bad press that PPI has been getting, and the current economic climate, are combining to encourage consumers not to take out protection for their loan and credit card payments.

Payment protection insurance is a "valuable product" which offers consumers a "safety net" that will help them to keep up with their financial commitments, the banking industry body said.

The BBA worries that "customers may be encouraged to cancel policies - or decide against taking them out - at precisely the time when a policy that covers the bills could be most valuable."

The statement said: "We have been working closely with the FSA to get PPI right, to ensure literature and sales processes live up to all regulatory standards and products meet customers needs. Banks are committed to helping their customers get a fair outcome and if anyone thinks they have a valid complaint they should speak to their bank."

The Financial & Leasing Association (FLA) has also responded with concern to FSA consultation on PPI complaints handling.

Fiona Hoyle, head of consumer finance at the Finance & Leasing Association, said:
"PPI provides real protection and peace of mind for customers, which is important as unemployment levels continue to rise.

"But it is obviously important that complaints are dealt with expeditiously and fairly," she continued. "The FLA and its members have therefore been working closely with the FSA in recent months and we will consider these proposals carefully to ensure the new complaint-handling guidance is fair and workable both for customers and companies."

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