Financial watchdog launches PPI comparison service
Borrowers looking to take out payment protection insurance are now able to compare policies using impartial comparison tables from the financial watchdog.
The Financial Services Authority (FSA) has launched the free service on its consumer website. This follows a report from the Competition Commission that found the majority of PPI customers are not aware that they have the right to shop around for a policy.
The Competition Commission has proposed banning the sale of PPI alongside loans and other forms of credit, a move which it hopes would prompt people who want to protect their payments to shop around for the most competition deal.
The FSA says its tables are designed to help potential PPI customers find products that meet their specific needs. Users will be able to compare PPI policies to cover mortgages, unsecured personal loans, secured loans and credit cards. The PPI tables will also feature single and regular premium policies
Chris Pond, director for financial capability at the FSA, says: “The FSA is committed to helping consumers make informed decisions about PPI and to shop around more effectively - the PPI tables are a key part of this.
“PPI is almost always optional and consumers need to consider their own financial circumstances when deciding to purchase it and make sure they are clear about what will be covered.”
The comparison service allows users to compare the price tags on products, as well as details such as exclusions and how pre-existing conditions are handled. Research from Which? recently found that as many as two million PPI policies have been mis-sold to people who are not eligible for the cover.
If you think you have been mis-sold PPI then you could get a refund. Read our guide to reclaiming PPI premiums and download our template letter.
Payment protection insurance is designed to cover you should you fall ill, have an accident or lose your job and can’t make repayments on loans or credit cards. However, research by consumer watchdogs found the cover to be overpriced, filled with exclusions (policies exclude self-employment, contract employees and pre-existing medical conditions) and were often mis-sold because the exclusions were never fully explained. In May 2011, the High Court ruled banks had knowingly mis-sold PPI and ordered them to compensate around two million consumers.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.