Page last updated at 12:09 GMT, Monday, 23 June 2008 13:09 UK

New online help for PPI customers

FSA website
The tables offer "comprehensive" coverage , the FSA says

People who want to buy payment protection insurance (PPI) can now get advice from the website of the Financial Services Authority (FSA).

The watchdog has launched a set of tables to help consumers compare the policies on offer and their cost.

PPI insures people in case they cannot repay loans due to ill health or job loss, and has proved controversial.

This month the Competition Commission said insurers were overcharging their PPI customers by 1.4bn a year.

A spokesman for the FSA said that the tables were "a starting point to give customers basic information about what the polices offer and what they cost".

"PPI is almost always optional and consumers need to consider their own financial circumstances when deciding to purchase it and make sure they are clear about what will be covered," he added.

Complaints

The selling of PPI has been very controversial for several years, with critics such as Citizens Advice describing the industry as a "protection racket".

Insurers have been accused of selling polices that are too expensive and which may even fail to provide the cover they claim to offer.

The FSA has levied numerous fines on financial companies for mis-selling PPI policies.

And the Competition Commission even suggested that to protect customers it might impose temporary price limits and ban firms from selling PPI policies to customers at the point at which they take out a loan.

In the last financial year nearly 11,000 people complained to the Financial Ombudsman Service about the PPI policies they had bought, making the insurance one of the fastest growing sources of complaint.

Comparisons

The FSA's own research has shown that many firms that sell PPI have not been treating their customers fairly because they do not provide them with enough, if any, information to decide if they really need the insurance.

People should be aware that there are alternative and better products than PPI
Which?

The new FSA comparison tables go some way towards helping.

They invite customers to type in basic details about themselves and their needs and then display the possible policies on offer and how much they cost.

The tables do not however cover the entire insurance market because some providers chose not to supply details of their policies.

However, the FSA said its tables still give "comprehensive" coverage and they also show who had not supplied information for inclusion.

The consumers association Which? warned consumers to be careful if buying a PPI policy.

"While comparison tables are always useful, people should be aware that there are alternative and better products than PPI," said Which? personal finance expert Teresa Fritz.

The other tables on the FSA website, which cover topics such as mortgages, savings, annuities and endowments, receive about 80,000 hits a month.


SEE ALSO
Retail boss fined over PPI sales
12 May 08 |  Business
'Thousands wasted' on insurance
21 Jan 08 |  Business
HFC Bank fined 1m over insurance
16 Jan 08 |  Business
Loan insurance probe to continue
06 Nov 07 |  Business
New advice on payment protection
04 Oct 07 |  Business
New attack on payment insurance
26 Sep 07 |  Business

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