PPI to be investigated

30 November -0001

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The office of fair trading are about to investigate the sale of payment protection insurance (PPI) for loans, after a super complaint by the citzens advice beaureau.

Citzens advice said that PPI was too expensve and often sold to people who did not need it.

The policies are designed to help people to pay off their loan if they lose their income, through illness, or another situation that is beyond their controll. But they were of ten sold to those who were self employed, on fixed term contracts, or were above the age limit on the policy.

The complaint also said that the policies excluded complaints such as a bad back and mental illness. The CAB outlined a number of other problems with PPI in September, which was based on complaints from people attending for advice

The OFT said it had already "identified a number of issues which point to the sector not working well for consumers".

"Borrowers may shop around for credit, but the complex nature of PPI and a lack of choice mean that they are less likely to shop around," said the OFT chief executive, John Fingleton.

"There is a high potential for consumer detriment - our study will look at whether consumers are getting a good deal or not."

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