PPI complaints set to soar

The number of complaints concerning payment protection insurance (PPI) could run into the tens of thousands.

According to financial research company Defaqto there may be a huge surge in complaints, but the firm warns that consumers may not be better off as a result.

A report by Defaqto highlights that lenders may increase rates and charges on money borrowed in order to make up for the loss of PPI income.

The firm also warns that bank charges may be imposed for some customers, spelling the end of free banking and, potentially, putting many consumers in a worse situation than they are currently in.

Defaqto is calling upon lenders to work hard to increase public confidence in the PPI market by becoming more open.

“Too many customers do not realise that they have the right to shop around for payment protection insurance,” said Brian Brown, head of insurance at Defaqto and author of the report.

“Therefore the industry must widen public understanding of PPI through greater transparency if the market is to be seen to be operating competitively and in the best interest of consumers.”

Mr Brown says that consumers should be made aware that they can get a loan from one bank, yet get PPI cover from another.

If you are considering taking out a loan it may be worthwhile getting PPI in order to protect yourself should your personal circumstances change and you are unable to keep up repayments.

The important thing to remember is that you are able to shop around for the policy that best suits your needs.

Tags: consumers."mr brown, head, money, research company defaqto, realise, public confidence, Mr Brown, worse situation