Loan Protection Cover is Still Being Mis-sold

According to industry officials millions of people are still being sold payment protection insurance that is not suited to their needs, which means that they are wasting money on cover that they will never actually be able to claim on. This type of cover is designed to cover repayments on loans and debts in the event of illness or redundancy that stops the policyholder from working and earning money. There has already been a major crackdown over the past year or two after it was found that many firms were mis-selling the cover to people that either didn’t want it or couldn’t benefit from it.

An investigation by consumers groups, the Competition Commission, and other authorities has recently revealed that there is still a major problem with the sale of this cover, with around a third of consumers paying for cover that they can never benefit from. It is thought that around six million people have taken out this cover for their secured loans over the past five years, but around two million may not even be able to make a claim on the cover – including pensioners who have been sold the cover even though they have no income to protect.

One campaign official stated: ‘We’ve always known that people were being mis-sold payment protection, but we were still amazed to discover the scale of it. It appears that salespeople are chasing their commissions, their bosses are chasing profits - where’s the sense of responsibility to the customer?’ One woman that was sold PPI stated: ‘Some months later I was diagnosed with a rare form of multiple sclerosis. I went to the bank to ask about the insurance, but they told me it was void. Eventually, after being passed from pillar to post, I was told that I should not have been sold the insurance in the first place as I was unemployed at the time.’