Banks, building societies and loan providers were attacked this week by consumer...
Banks, building societies and loan providers were attacked this week by consumer group Which? for the mis-selling and over-pricing of Payment Protection Insurance (PPI).
Responding to a report by Credit Suisse First Boston, Laurence Baxter, senior policy advisor at Which?, told Insurance Times: “Consumers are being sold PPI on loans and mortgages where it is inappropriate, where they are ineligible or where they already have cover elsewhere.
“In some cases the policy is simply tacked on to the total cost of the loan without the consumer's knowledge. This is wholly unacceptable.”
Baxter said the cost of PPI was “staggering” when one considered only 4% of customers actually used the cover, and some 25% of requests were refused.
Insurance added on to financial products represented 14% of Lloyds TSB's total profit in 2004, some £500m. At Alliance & Leicester, total profits from additional insurance cover were £74m, 14% of end of year group profit.
Baxter said: “This is driven entirely out of self-interest.”
