The Competition Commission’s recent investigation into payment protection insurance (PPI) has been welcomed by one price comparison website.
Editor of moneysupermarket.com Clare Francis approved of the crackdown on the issue by the commission, which has recommended banks should be banned from selling such insurance to borrowers within two weeks of them taking out a loan.
However, she also noted that the recommendation could be bad news for borrowers, as banks may increase their interest rates on loans as they look to recoup lost income.
And she stated that PPIs can be of use to those who are struggling with debt management.
“The biggest reason for people seeking help with their debts is a change in personal circumstances … and this is exactly when an appropriate PPI policy can prove a wise purchase,” she explained.
An increasing number of borrowers are turning to pay-day loans, logbook loans and pawn brokers for credit as they are unable to obtain finance from lenders, Frances Walker of Credit Action has claimed.
By Tom Musk