Caution urged over payment protection

Posted : 30-11-2004

Consumers looking to take out a loan have been urged do their research before accepting standard payment protection deals offered by the lender.

With one month to go before the FSA is to start regulating the sale of general insurance, consumers have been warned that regulation won't protect them from extortionate prices.

The insuresupermarket.com, the price comparison website, explains that lenders could be charging you five times more for loan payment protection than stand alone policies.

Richard Mason, director of insuresupermarket.com, described payment protection insurance as "probably the biggest scandal in financial services after pensions and endowments".

"While it is good news that this type of insurance will come under FSA control in January, it does not necessarily mean that the price of the insurance will be any cheaper," he added.

"By shopping around and buying a standalone policy you could save yourself £1200 over three years on a £7500 loan."
© DeHavilland Information Services plc

The views expressed within the article are entirely those of Adfero Ltd and are not those of BDML Connect Ltd