Consumers get "great news" on PPI

24/07/2009

Credit crunched consumers have been given rare "great news" with new Payment Protection Insurance (PPI) regulations, a financial website has said.

Fairinvestment.co.uk pointed out that the plans, which include bans on selling the insurance at point of sale, will make it less likely that customers will get ripped off.

PPI works by covering the policyholder's card and loan repayments in times when their income suffers a sudden fall - such as through job loss.

However, the insurance has faced criticism from consumer groups for being mis-sold and representing poor value for money in some cases.

Julie Smith, spokesperson at Fairinvestment.co.uk, said: "With lenders not being allowed to sell PPI to customers at the time of sale, or in the following seven days, consumers will have some breathing room, to compare other policies on the market and make an informed decision, not one based on pressure from the provider to sign up on the spot."

The financial website also pointed out that, with unemployment in the UK recently hitting a 14-year high, the insurance could prove useful for some customers.

"It is worth remembering that while there have been many cases of mis-sold PPI, which have led to consumers claiming back thousands of pounds, it can, in some situations, offer consumers valuable protection," Ms Smith added.

"For example, if they suddenly find themselves unable to work due to illness or injury, or are suddenly made redundant, which in today's economic climate is becoming a reality for thousands of people."

The new PPI plans were originally announced by the Competition Commission in January.

Tags; Debt Management and Banking, Credit Card Lifestyle, Recent Graduate Debt,

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