Fairinvestment.co.uk comments on the news that five of the UK's largest banks have agreed to stop selling single premium payment protection insurance
The announcement from the Financial Services Authority that a number of leading banks, including Barclays, RBS, Lloyds Banking Group, Alliance & Leicester and Co-Operative, have agreed to stop selling single premium payment protection insurance
is "great news" for the consumer, says Sharon Bratley, chartered financial planner at Fairinvestment.co.uk.
"Consumers will really benefit from this decision by the banks to stop selling single premium loan insurance," she said.
"While loan insurance
can provide valuable protection in these uncertain times – with people facing job losses and finding themselves unable to keep up with the repayments on their debts – it is vital that they are treated fairly and not sold something which is not appropriate.
"Single premium payment protection insurance is when the insurance premium is added to the total cost of the loan, which means it accrues interest, and this in turn meant that in a number of cases the customer ended up paying back a lot more than they bargained for.
Furthermore, she added, "if the loan
is cut short because it is paid off before the end of the term, then the customer might still have to pay the full amount of the loan insurance premium, unlike monthly premiums which can just be stopped.
"Some customers do not understand what PPI is when they are sold it, and are unaware of the costs involved. Often, they do not realise that they can shop around for PPI and do not have to get it from their loan provider, or even that they do not have to buy it at all if they do not wish." If you think you were mis-sold loan insurance, you could make a complaint today!