Loan cover cost investigated

Moneyfacts, Defaqto and moneysupermarket research has found that consumers do not always get the best deal available on PPI and are “being ripped off”.

Simon Burgess, managing director of British Insurance Limited, commented on the findings, which have been tabulated: “The big players have already had their knuckles rapped by the Office of Fair Trading (OFT) for their anti-competitive practices and these tables clearly evidence how consumers are being ripped off.”

For instance, Mr Burgess said that his company charged £2.15 per £100 for PPI cover that firms such as NatWest or Direct Line were charging at £25 per £100.

PPI is currently being investigated by the OFT due to the high cost and low pay-out rates compared to other forms of insurance.

Earlier this month Mike Naylor from Which? magazine said that PPI was of “little benefit” and added “significantly” to the cost of a loan.