Which Warns – Watch Out For Payment Protection

Which Warns – Watch Out For Payment Protection

Friday 18th May 2007

The consumer organisation Which are warning individuals this month to look out for payment protection costs that may be added to premiums when taking out a loan.

Payment protection insurance is a service designed to help people who may have difficulty re-paying their debt in the future due to unforeseen circumstances such as illness or unemployment. The Competition Commission is currently investigating the payment protection industry however after reports of miss-selling. Which contacted 41 leading lenders and 24 of these automatically added on the cost of payment protection without consultation thus highlighting the problem.

The Office of Fair Trading have also undertaken a year long investigation into the payment protection industry finding that customers do not shop around for the most cost efficient deal on payment protection and advised consumers to undergo a price comparison before accepting the first offer.