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PPI, BUT NOT AS WE KNOW IT

David takes on Goliath

Paymentcare the dedicated protection insurance provider is launching a unique stand alone Payment Protection Insurance policy that slashes monthly premiums for consumers by more than half in comparison to high street banks and loan company rates. The policies offer consumers true flexibility in terms of level of cover and benefits and in addition, cover includes a free ‘back to work’ service available to the policyholder and their immediate family. The ‘Paymentcare Protector’ range will initially consist of Loan Protector and Income Protector with cover available online and by telephone from Monday 25th July.

In light of the recent furore surrounding the hazy world of Payment Protection Insurance you would be forgiven for thinking PPI is a dirty word. At present, most cover is being sold at excessively high premiums and with questionable sales tactics by high street banks and loan companies. The Financial Services Authority (FSA), Office of Fair Trading (OFT), Treasury Select Committee (TSC) and WHICH? Are all deeply concerned with the abuse of these products and plan to further investigate mis-selling allegations.

In many cases consumers have been sold policies which do not provide appropriate cover, very often resulting in claims being refused when consumers have made a legitimate claim. However, Paymentcare have come up with a refreshingly new PPI product that is committed to fairness and value for money for everyone. Not only do they offer a wide range of options monthly cover is available for just £4.50 for full accident, sickness and unemployment cover and £5.50 including life and terminal illness cover on a back to day one basis.

Over-charged and under-protected

In the current market, it is possible to get PPI cover at a premium of £11.73p per £100 of cover per month at best, and at worst this figure is currently £22.69p per £100 of cover per month. Both are from household name providers. That’s an extra £22 to cover every £100 of monthly repayment! Furthermore, as PPI is most commonly sold by high street banks and loan companies as a “single premium policy” this is even more of a rip-off as consumers also pay interest on the single premium which has been added to the original loan amount upfront.

It has already been well documented that these existing offerings are not, as you would expect, from back street loan sharks preying on the needy by attempting to make even more money from their unfortunate circumstances. These offerings are from high street banks, building societies and supermarkets – the institutions that, one would expect, would be able to offer ‘more for less.’

What is lesser known about PPI products sold by many large institutions, is that in some cases, they automatically include the cover at the quotation stage without establishing that the borrower actually wants it. WHICH? recently conducted a mystery shopper survey contacting 20 personal loan providers with startling results. Many included PPI without even being asked, many others failed to find out whether policies were suitable and others still, failed to even send out policy documents or fully advise potential customers on what is and what isn’t covered.

Shane Craig, MD of Paymentcare said “Personal debt in the UK has grown to dangerous proportions, now exceeding the trillion pound mark. The average household debt in the UK is £10,700 (excluding mortgages) according to The Citizen's Advice Bureau who dealt with well over one million new debt enquiries last year, suggesting that many people are struggling to maintain payments. The trouble is, traditional PPI providers know this and appear to be praying on peoples’ fears rather than offering policies designed with consumers needs in mind, and they’re taking advantage of people in debt, often making a desperate situation much worse. It’s scandalous that in some cases consumers have been sold policies that they didn’t really want, because they were led to believe that their loan may not have been approved without it. This is unacceptable and we intend to buck the trend, I urge anyone that has payment protection insurance attached to a loan to get a quotation for a stand alone policy as they will undoubtedly save hundreds of pounds over the term of their loan. Monthly paid PPI is a great product for those that genuinely need it, especially when you consider the incidence of accident and sickness and growing numbers of redundancies within the UK. We know that one size doesn’t fit all, which is why we offer a comprehensive range of cover options to suit our customers’ needs at the lowest possible price.”