The Competition Commission has revealed that banks are loaning at unprofitable rates, instead relying on payment protection insurance for their profits . The enquiry estimates banks’ revenue from PPI sales to be between £2.2 billion and £2.6 billion a year. With payment protection insurance policies costing banks around £20 to provide, the estimated £1,200 such policies bring in have attracted huge criticism. This opposition has intensified after instances of expensive payment protection policies being sold to people who can’t claim.
PPI is sold to cover repayments on loans, mortgages and credit cards in case a borrower becomes ill and is unable to work, or if a borrower loses their job . The Office of Fair trading has receive vast numbers of complaints regarding PPI, with the latest enquiry potentially leading to a tightening of regulations.
Enquiry Reveals Reliance on PPI Insurance on Loans
Enquiry Reveals Reliance on PPI Insurance on Loans
Tue, 05 Feb 2008
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