Should Banks Stop Selling PPI?

Should Banks Stop Selling PPI?

Should Banks Stop Selling PPI?

The question has been raised before see Financial Services Authority FSA

Now that the banks and lenders have lost in the High Court to challenge their Regulator on how to review and pay back mis-sold ppi when customers make a claims one begs the question should PPI be stopped.

Is ppi claim solicitors view that PPI should not be stopped but simply regulated better.  PPI is a good product if sold correctly and huge commissions and incentives are not loaded.  There are many ppi policies on the market that do not attract the large fees, costs and expenses which often the banks and lenders have levied on the loan.

Certainly amongst many other problems of mis-sold ppi policies, the problems in the past is that the banks make money on mis-selling ppi when they add the total cost of the policy onto the loan or credit card on the first day of the loan.  What this means is the banks make extra money on interest.  In effect the loan the borrower requires is offered two loans rolled into one.  The initial and original purpose of the loan which was to be used to buy a car, house, home improvements etc and an additional loan was simply for the PPI.

Thus providing ppi is sold correctly, that it is separate from the loan and can be cancelled at any time without penalty it could be a worthwhile product.

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
Image CAPTCHA
Enter the characters shown in the image.