Stock Market Explorer

Posted on 16 Oct 2008

If you've taken out insurance for your home or your loan then you're at serious risk of being charged far too much, just for protecting yourself. The Competition Commission has been carrying out reports again, and have found there to be little or no competition within the payment industry. This is why those that provide it charge lots.

As well as this, consumers appear totally oblivious to the fact that they have to shop around for this type of thing, prior to paying for anything. A lot of people are so blinkered by the ostensible trustworthiness of the financial institutions, that they don't realise that they don't have to take out payment protection with the same company that they did the borrowing from. Did you know that?

If your looking for something that's worth 1.4billion a year then you'll find it in the PPI industry, because that is how much its worth. This isn't so much though, when you look at the rip-off deals people have been getting. A stand alone PPI is the best deal you can get, costing about & 163;3.00 for every & 163;100.00 worth of borrowing that you do. If you're getting PPI from the nice friendly financial institution that you got the loan or the mortgage from, then you can forget that. Expect to pay more like & 163;28.00 for every & 163;100.00 borrowed!

As well as making PPI prices unbelievably high, Some of these financial institutions will knowingly sell PPI to people that cannot make a claim if they have to, which is unbelievably awful. There are loads of mitigating circumstances written into PPI policies that are designed to make it really difficult to make a claim. As this is the case, it's important that anyone considering taking out PPI has a really good look at the product they're buying, and understands implicitly what the rules and regulations of the policy are. You really have to be reading the small print. If you're going to sign for something called premium PPI, then you have to be even more careful, because premium PPI gets attached to a loan and you therefore have to pay interest on top of however much the PPI cost you in the first place.

Because absolutely loads of people have been contacting the citizens advice bureau, in regards to all of their loan and mortgage repayments and PPI policies, a complaint of colossal magnitude has been presented to the Office of Fair Trading, or OFT. It was at this point that the Competition Commission determined to get involved, and what they did was they got themselves to carry out a survey of the market. During this survey of the market they've been working for sixteen months and will not be publishing anything until December.

They are expected to come up with a catalogue of recommendations, which will be designed to protect the consumer, and regulate the industry somewhat. it's thought that one of the recommendations will be a temporary limit on how much companies can charge for PPI. One other prospective recommendation is that the companies will have to explain that it isn't compulsory to take out payment protection with them, just because it's them that they took the borrowing with. With all of these measures being implemented, the market should become far more of a level playing field. All told the whole industry should benefit from being regulated, and this is inclusive of the customers.

This article is written by Jonathan L Walker, on behalf of Claims Management UK, specialising in helping people with their Mis-Sold PPI.