Payment Protection Insurance (PPI) has been a hot topic in the financial sector recently, and research company Capital Blue has found that more than 30 per cent of new mortgage borrowers over the last year have felt pressurised into buying related insurance products.
The FSA (Financial Services Authority) has been investigating several loan, credit card and mortgage companies that appear to have been mis-selling PPI – insurance that covers people’s loan repayments if they are unable to work.
And, with PPI currently attracting annual revenues of £5.5 billion, some companies have become cut-throat in their sales techniques. There are increasing reports of firms selling policies that customers do not understand, and that, in many cases, are unnecessary.
A recent Capital Blue survey involving 15,000 people who had recently taken out mortgages revealed that a worryingly high number of people felt they were being coerced into buying PPI and other types of loan insurance.
The company found that either the customer was not convinced they needed the product, could not afford it, or the product was not appropriate to their individual circumstances.
Furthermore, Capital Blue believes this ‘pressure to buy’ sentiment is likely to increase in future polls unless action is taken against the culpable companies.
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