The mis-selling of payment protection insurance (PPI) by financial institutions has prompted protection specialist Goodfellows to launch a new loan protection policy.
According to a survey by Which Magazine, banks and other leaders are guilty of selling expensive and in many cases unsuitable PPI.
Which's Mike Naylor said: "The results of our investigation are shocking. As well as mis-selling we concluded that the ABI and GISC codes are being flouted."
Moneysupermarket.com found that lenders are also guilty of deception. Spokesman Richard Parker said: "They lend customers extra money to pay for PPI, so borrowers then have to pay interest on the cost of the product.
"The monthly premiums are often added up and taken as a single payment at the beginning of the loan term but borrowers don't get a rebate if they pay off the loan early."
Goodfellows has launched the new product to provide extra value for money. Managing director Simon Burgess said: "We have endeavoured to put an element of best advice into the sale of PPI with this totally flexible product that has none of the pitfalls normally associated with this insurance."
