LONDON - Leading charity Citizens Advice has accused banks of mis-selling payment protection insurance (PPI) and has sought an investigation into the matter in a “super complaint” lodged with the Office of Fair Trading (OFT).
Payment protection insurance is basically a scheme which helps people who fall sick or lose their jobs manage their debts. However, Citizens Advice says that the whole thing has been turned into £5 billion "protection racket".
The group said that PPI was too expensive and ensured that people who brought them could never make a claim on them. David Harker, the chief executive of Citizens Advice said that the whole mess reeked of a scandal, "We badly need an official investigation of how this market is operating, leading to effective regulation that ensures a fair deal for all consumers, and which also protects the most vulnerable," he said, alleging that precious little had been done to regulate this policy. The charity claimed that the policies, which were sold often omitted common illnesses such as bad backs and mental problems. Citizens Advice said that 85 per cent of its clients who made a claim on this basis were denied. People who were self-employed or on fixed-term contracts were banned from making a claim and arbitrary age limits were imposed in some cases, said the charity.
But the British Bankers' Association (BBA) said that these policies were under strict rules, Brian Capon, spokesman for the BBA said, "The Financial Services Authority regulates the sale of PPI and what cover is made clear to purchasers. PPI is completely voluntary and the key is for purchasers to always make sure the cover matches their needs."
The OFT has 90 days in which to respond publicly. It could also launch a formal investigation.
Posted
on : Sat, 17 Sep 2005 06:35 GMT | Loans News
By : Pippa Fielding
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