Payment Protection Insurance Still Being Pushed
Some banks are still trying to palm costly payment protection insurance (PPI) policies onto consumers, a new Which? Money probe reveals today.
Its undercover investigation found that NatWest and Royal Bank of Scotland automatically gave quotes including PPI four times out of five when asked for a personal loan.
PPI is sold by many banks and credit card companies when you take out a new loan or card.
It’s designed to cover your repayments if you become unable to work due to certain illnesses or injuries, or if you lose your job.
PPI exclusions
But PPI can add £1,000 to the cost of a £5,000 loan paid over three years and policy exclusions mean it could fail to pay out when you need it.
In March a similar Which? Money investigation found more than half the quotes received by telephone -24 out of 41 calls - automatically included PPI.
And while there has been some improvement since then, some banks are still not treating their customers fairly when it comes to the sale of PPI.
Which? Money researchers made five calls to each of ten lenders – Abbey, Alliance & Leicester, Barclays, Halifax, HSBC, Lloyds, TSB, Nationwide, NatWest, Northern Rock and Royal Bank of Scotland.
In each case they asked for a quote for a three-year £5,000 loan and in ten calls the lenders quoted the cost of the loan including PPI and only gave the cost without when prompted by the researchers.
Undercover investigation
NatWest and Royal Bank of Scotland – which are part of the same group – did this four times out of five.
In 20 out the 50 calls, quotes were given for both. Abbey and Northern Rock did this every time while Alliance & Leicester and HSBC did this in four out of five calls.
A loan quote without PPI was given first in only ten calls – twice by Barclays and Halifax, once by HSBC and in all five calls to Nationwide.
We also sought online quotes from the same lenders. Lloyds TSB, NatWest and Northern Rock gave quotes including PPI first and then gave an option to get a quote without it.
PPI campaign
Alliance & Leicester, Halifax and Royal Bank of Scotland gave quotes with PPI only when asked and Abbey gave both quotes together.
Which? Money Editor Martyn Hocking said: ‘While some lenders are still including PPI in loan quotes without being asked to, it seems to be happening less often than last March, when we did similar research.
‘However, our findings and the results of the Financial Service Authority’s latest research reveal that some providers are still failing to treat their customers fairly when selling PPI and there is a long way to go before you can be sure you are being sold insurance that is both necessary and good value.’
Which? believes many consumers may be paying for PPI they don’t need or that is unsuitable for them.
We have launched a campaign to help you get your money back if you think you may have been mis-sold a policy.
Tags: ppi compensation, ppi claim