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Banks and money lenders have come under fire from the Competition Commission for misleading customers over payment protection insurance.
The commission has found that the industry lacks competition which is driving up the cost for customers who have taken out payment insurance on credit cards, mortgages and loans.
It was also claimed that many of the policies were mis-sold to customers and in some cases, lenders were creating the impression that it was impossible to receive the loan without buying the protection plan that goes with it.
The PPI market is a lucrative one with around 14 million customers generating multi-billion pound profits for lenders. But that could be about to end after the Competition Commission’s latest report.
“It’s great to see a big beast like the Competition Commission getting its teeth into the PPI market,” said Martin Lewis of MoneySavingExpert.com
“We’ve seen so many consumers have money ripped out of their pockets. PPI is big business; when you get a loan, the lender is usually making more money from the insurance than the loan. Yet as it’s hidden in the repayments, people don’t realise they’re paying £1,000s over the loan’s life.”
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