A Can Of Worms!
It seems that by proposing a ban on the sale of Payment Protection Insurance (PPI) at the same time as completing an application for a personal loan, credit card, or homeowner loan, the Competition Commission (CC) has opened a can of worms.
A large number of experts within the finance and personal loan industry are up in arms at the proposals and now a new survey from MoneyExpert.com has shown that a large percentage of people applying for a new loan will probably end up without this important protection, if the plans are carried out.
The survey, which was conducted amongst 1,440 people last month, has shown that around two thirds of those interviewed feel that they should be allowed to take out PPI at the same time as a loan.
More worryingly, around twenty per cent of people said that if they were not offered PPI at point of sale of the loan, they probably would not bother to take it out at all and a further 42 per cent said that they would be likely to forget to apply for PPI at a later date.
The idea from the CC is that people would have the opportunity to shop around for a more suitable product and possibly save themselves a considerable amount of money on premiums, but the reality is that most of these people would not bother with cover at all, or not know where to begin looking for alternative cover.
Sean Gardner of MoneyExpert.com said “The Competition Commission deserves support in its attempt to improve the sale of Payment Protection Insurance in the UK, but doesn’t deserve support if its proposals lead to people missing out on insurance if they need it. The likelihood is that too many people who want insurance and who ought to at least have the opportunity to consider it will lose out as a result of the proposal to ban the sale of PPI along with credit.”
