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Anorak | Sneaky Lenders Pulled Up By FSA On PPI

Sneaky Lenders Pulled Up By FSA On PPI

by | 12th, July 2007

small-print.jpgFOR the vast majority of us, organising any kind of loan is an arduous task akin to some really hard maths homework at school. And banks, well aware of just how easy it is to blind us with numbers and complicated small print, have been making the most of our financial ignorance.

The automatic addition of payment protection insurance (PPI) has been one of the most lucrative and sneaky japes instigated by lenders, with millions of pounds made each year from the ‘add-on’ sales of this extra cover, cover which is often totally useless.

But now the Financial Services Authority has decided to clamp down on the unscrupulous practice, forcing banks and loan companies to stop automatically including PPI when customers sign up for new financial products.

From January next year, customers will have to actively decide to purchase the insurance, in a move which could hit lenders and banks hard. However, the new rules will only apply to internet deals.

Vernon Everitt of the FSA says: “We are pleased that firms have agreed to change the way they sell PPI over the internet. This change means that it will be up to the customer to actively choose to buy PPI rather than it being sold automatically.”

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Posted: 12th, July 2007 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink