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OUTLAW PPI HARD SELL WITH A SWITCH TO US-STYLE SYSTEM – BROKER CALLS ON ACTION TO CLEAN UP BANK MIS-SELLING OF LOAN PROTECTION

* Banks should be banned from PPI hard sell on loan agreements
* Urgent review of Consumer Act recommended
* New report from Credit Suisse highlights Paymentcare as cheapest in market*

SWITCHING to a US-style payment protection insurance sales system, whereby banks are not allowed to push PPI/ASU cover to borrowers when signing a loan agreement, will help protect vulnerable borrowers from astronomical policy charges, said Paymentcare MD Shane Craig.

Paymentcare, the specialist payment protection provider, also called on the government to introduce a clause in the forthcoming revision of the Consumer Credit Act to further protect borrowers.

“Outlawing the selling of PPI at the point of sale – as they do in the States – will greatly reduce the currently unacceptably high incidence of mis-selling of expensive and often useless cover,” said Craig.

“The perfect opportunity to make it illegal is to amend the Act: we also want to see lenders being forced to put a disclaimer on their loan products, making it clear that payment protection insurance is not compulsory for borrowers.”

And, in the week that Citizens Advice appealed to the Office of Fair Trading to launch a probe into the multi-billion pound payment protection insurance industry, Paymentcare also called on the total banning of single premium policies.

“It’s no longer a question of profits – it’s sheer greed that’s driving banks and lenders to sell ‘single premium’ cover where a lump sum is added to customers loans, rather than offering monthly paid policies, which the customer can cancel at any time if they feel they no longer need the cover. It adds insult to injury that they then charge interest on these upfront payments,” said Craig.


Paymentcare offers the lowest PPI premiums on the market:

-Cover per £100 of monthly benefit at only £4.50 for full ASU cover
-A range of cover options including Life, Accident & Sickness which is more suitable for the self employed


Ends

• PPI – Time for Change. New (13 Sept 05) research paper from Credit Suisse First Boston…
• “Independent providers offer much better value…. Paymentcare offers loan and income protection at less than half the cost of the sector.”