Payments Premium Insurance -PPI -To Be Axed by the Big Bank

The Financial services Authority (FSA) has fined banks and lenders for the mis-selling of Payment Premium Insurance (PPI) & for failing to treat their customers fairly. Payment Premium Insurance cover (PPI) is sold to borrowers to cover them against the risk that they may not be able to pay their monthly payment on a credit card balance, mortgage or personal loan; due top ill health, accident or redundancy. PPI has in the past been a major source of income for banks, finance companies & retailers .The commissions paid received would have been from 25% to 75% of the total payment for the protection policy taken out. This is outrageous!A whole reclaim industry has grown on the back of Payment Premium Insurance being mis-sold & anyone with a personal loan, car finance or a mortgage should check if they have a single premium policy as they could claim their money back.. Some companies have been ruthless in their sales techniques whilst others have just mislead customers into believing that they would not get their loan or finance agreed if they did not take out PPI protection.Finance companies & Banks have been guilty of selling big chunky sized Payment Premium Insurance policies; usually around £3,000 to £4500 which they have then added to the mortgage, finance or personal loan agreement. The payment for the PPI cover would then be added to the initial loan amount. This would increase the amount borrowed by a few thousand pounds & finally Interest would then be charged on the entire life of the loan. Outrageous!

The Competition Commission would like banks, finance companies & retailers to stop selling PPI policies for 14 days after the finance was arranged. In early October last year the Financial services Authority (FSA) said it would be stepping up its action over the mis-selling of Payment Premium Insurance (PPI) in the future. It is little wonder that Royal Bank of Scotland, Nat West Bank, Barclay, Lloyd Banking Group, Alliance & Leicester, & the Co-Operative Bank have announced that they intend to stop selling single block Payment Premium Insurance (PPI) with personal loans by the end of January. The FSA now hopes that other firms will follow the lead of the Big Banks & cease selling Payment Premium Insurance (PPI).In view of this announcement by the banks to withdraw PPI you should consider Mortgage Payment Protection Insurance (MPPI). Protecting our home is a basic need during a recession especially one with so many uncertainties. If we are made redundant we still need money to pay our mortgage & bills for 13 weeks or three months under the new initiatives recently announced by the government before we qualify for their help & assistance.Almost all of us harbour fears of being made redundant; we are concerned about how we would pay these bills & commitments & we fear repossession of our homes. Mortgage Payment Protection Insurance can help to protect our mortgage payments, personal life insurance and your building and contents insurance for up to 24 months if you cannot work due to unemployment or suffer a disability. We can have these policies set so that they pay out after thirty days back to day one. The Council of Mortgage Lenders is now encouraging all mortgage borrowers to consider the advantages of taking out independent mortgage payment protection insurance (MPPI).Article Source:

Leave a Comment