Insurers predict surge in debt if PPI is reformed
Insurers predict surge in debt if PPI is reformed
Friday 6th June 2008
Payment protection insurance (PPI) is typically sold along with loans and is intended to cover repayments in the event of the policyholder losing their job suddenly.
However, according to banks and buildings societies, proposals unveiled yesterday to make the sale of PPI more competitive could prompt insurance companies to stop offering the cover.
This would leave thousands without protection at a time when the economy is slowing, which could fuel a surge in redundancies and unemployment, the British Bankers' Association (BBA) forecasts.
Angela Knight, BBA chief executive, told the Times: "If the recommendations are adopted it could leave customers exposed just as economic conditions are worsening."
The move to reform PPI comes at a time when the cost of personal loans and taking on credit card debt is increasing.
This is putting increasing mental strain on consumers with a recent survey conducted by MoneyExpert.com showing that 38 per cent of people are worried about their ability to meet repayments.
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