PPI not needed by customers, expert claims
19 September 2008
Consumers should seek financial advice about their situation as a whole rather than forking out for credit card PPI, an expert has claimed.
According to Lucy Widenka of Which?, the average claims ratio of credit card PPI is "only 11 per cent" which shows that people are not likely to claim on it.
She goes on to say that people could benefit more from spending on other forms of money protection such as income security.
The Financial Services Authority (FSA) published a review in September 2007, detailing PPI sales.
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The survey showed a number of apparent failings such as firms not properly explaining the PPI product plainly enough to the customers, including not making clear the exclusions and limitations of the policy.
Other issues picked up in the review include businesses not making sure the customer was eligible to claim, not discovering whether the PPI was actual suitable for the customer's needs and "poorly put together" statements of demands and needs in advised sales.
The FSA announced at the time that it would like to see larger fines for companies guilty of poor sale practices.
