Loans PPI rapped – again

12 May 2006
Payment protection insurance (PPI) has come under a great deal of scrutiny in the national press in recent months and now financial specialist Defaqto have added another voice to the braying hordes.

Brian Brown, associate director for Defaqto, has slammed the small print that frequently goes hand-in-hand with PPI, saying that loans companies use it as a money-making tool rather than a genuine product.

Mr Brown argues that the filtering and checking process for eligibility is done the wrong way round and lenders frequently do not take the necessary precautions to ensure PPI is right for the people they sell it to.

"They assume that all customers are the same for insurance purposes," he said. "They then filter them out when they come to claim by rejecting those that were not really eligible."

Mr Brown said this approach is unacceptable as it is effectively charging people money for something that will never benefit them and relying on a simple tick-box approach to verifying that all the "tiny print about pre-existing conditions" has been read.

Finally, Mr Brown claimed that little is done to guide customers who take out PPI and that the majority of focus on the subject comes when the insurance company or loans company will be the ones losing out, rather than the consumer.

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