Payment Protection Insurance comment from BIBA

Payment Protection Insurance comment from BIBA

Commenting on today’s announcement that the Alliance & Leicester, Barclays, The Co-Operative Bank, Lloyds Banking Group (including Lloyds TSB, Halifax, and Bank of Scotland), and RBS/Natwest will stop selling single premium Payment Protection Insurance (PPI) with unsecured personal loans, BIBA Head of Technical Services Peter Staddon, commented:

“This is a valuable first step towards providers accepting that single premium payment protection insurance (PPI) is bad value for the customer. We believe that single premium PPI policies should be outlawed and urge the rest of the industry to follow suit.

“We share the FSA’s concerns about adding the loan and PPI premium together because it attracts higher rates and feel that this should be prohibited. There are other premium financing facilities available which allow the consumer to switch to monthly premiums and offer the consumer more choice and control.

“PPI is a useful product, and consumers need to assess if it is suitable for their individual requirements and need to be aware that cover is available, and often cheaper, from providers other than from where their loan was purchased. I strongly recommend that individuals looking to purchase this cover contact an insurance broker or intermediary who specialises in PPI rather than choose a policy which is tied to a loan.”

To find your nearest BIBA broker visit the ‘Find A Broker’ section of the BIBA website, www.biba.org.uk or call BIBA’s consumer helpline on 0870 950 1790

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