Watch out, there's PPI about

People arranging a personal loan over the telephone or internet should watch out as they may unknowingly buy expensive payment protection insurance. So claims Which? Magazine.

When the consumer advocate searched for a loan it found that more than half the quotes received by telephone (24 out of 41 calls) automatically included payment protection insurance (PPI). A number of lenders quoted both with and without PPI; just one quote didn't include it at all.

The results were similar online - Lloyds TSB, Tesco and NatWest initially quoting with PPI and the borrower having to click through to another page to get a quote without it. But the magazine did give the thumbs up to Norwich and Peterborough BS however - its website allowing borrowers to choose at the start of the process whether they wanted a quote with or without PPI.

Payment protection insurance (PPI) isn't compulsory and income protection insurance is a much better option for most people. Both the FSA and the OFT have expressed concerns about the PPI market, and the FSA recently fined a number of lenders for mis-selling.

03 May 2007 © Moneyextra.com

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