Money News: PPI providers 'are still failing their customers'
Sunday 22 October 2006
Payment protection insurance (PPI) is to be investigated by the Competition Commission after the Office of Fair Trading (OFT) decided that the cover is "failing consumers".
The OFT has been probing the £5.5bn industry since April - liaising closely with City regulator the Financial Services Authority (FSA) - following a "super-complaint" lodged by Citizens Advice.
PPI is sold with loans, credit cards and mortgages and is designed to fill the breach if the borrower is unable to make repayments because of accident, sickness or unemployment.
The problem is that policies can be overpriced as well as mis-sold, often using high-pressure sales tactics, to people for whom they have little or no value. The self-employed, for example, may find their claims are rejected, as may people who have to leave work because of back pain; exclusions like these are often buried in the small print of the policies
"It is clear that many consumers are failed by PPI," said the OFT's chief executive, John Fingleton. "It gives customers a poor deal and often less protection than they think."
While banks and other lenders have taken limited steps to improve the situation, the OFT said these measures would "not make major improvements to competition in the market".
The OFT found that consumers did not shop around for the best deal on PPI, and that the complex nature of the cover made it difficult to make comparisons between policies.
There are other concerns that the big banks dominate the market. Small, standalone PPI rivals can't apply the competitive pressure needed to bring standards up and prices down.
On top of this, the OFT found evidence of a low claims-to- payouts ratio, compared with other insurance products.
In a separate report last week, the FSA found that some PPI providers "are still failing to treat their customers fairly" by not giving clear information during sales conversations - including how much a policy will cost. Buyers might also remain unaware that certain medical conditions are excluded, and some firms don't collect enough information from the customer on any policies already held that might overlap with PPI.
Equitable Life: Policyholders left in compensation limbo
A long-awaited report into the near-collapse of insurer Equitable Life has been delayed until next year after "critical evidence" was handed over late in the day by government officials.
Parliamentary Ombudsman Ann Abraham is investigating whether there was maladministration in the regulation of Equitable by government departments.
The insurer was plunged into difficulties after losing a legal battle in the House of Lords over the rights of some policyholders - leaving it with a £1.5bn liability.
If Ms Abraham finds evidence of maladministration, she can recommend that the Government pay compensation to policyholders.
But in a letter sent to MPs last week, Ms Abraham said that late, "extensive" evidence from the Government needed further examination. Her findings, due for publication next month, are now expected to come out in May.
The Ombudsman said she had "seen nothing to suggest this was anything other than the result of a misunderstanding".
The delay is disappointing news for thousands caught up in the collapse. Ms Abraham's report is seen as one of the best hopes for policyholders seeking compensation after the insurer closed its doors to new business in 2000.
The European Parliament has also opened an investigation into whether the UK Government failed in its role as regulator to protect Equitable policyholders.
Financial prospects: Clouds gather for 'Maggie's children'
Children born during the Margaret Thatcher years are an "unlucky generation" whose lives will be blighted by huge debts, spiralling house prices, delayed retirements and poor pensions, according to a new report from a Tory think-tank.
The report, 'What Future for Maggie's Children?', examines the effect her policies will have on those born between 1980 and 1995 - and how these people will fare in the next 50 years.
Policy Exchange, in partnership with Age Concern, has compiled a series of essays outlining the bleak prospects for this age group - who will struggle with student debt and ever-inflating house prices. It also says they might not be able to afford to stop working when they reach their sixties due to poor pension provision, and that many will be living alone because of family breakdowns.
The report warns that without big changes in government policy, "Maggie's children" will face much greater pressure than their parents' generation.
"What is needed is a major adjustment - in housing, pensions, savings and education - to keep up with economic and demographic change," said Roger Gough, Policy Exchange's research director.
The think-tank recommends the setting-up of lifetime savings accounts with top-ups from government, and tax credits to grandparents who provide childcare.
Regulation: Watchdogs unite to help consumers
A trio of consumer watchdogs for the postal and energy industries are to merge into a new, unified body: Consumer Voice.
The Government has proposed that Energywatch, Postwatch and the National Consumer Council (NCC) become one organisation to give consumers a single point of contact for problems and queries.
"This is about getting people a better deal for their money and protecting them from being ripped off," said Ian McCartney, Consumer Affairs minister.
This announcement follows a public consultation launched in January this year.
Under new state pension rules we will all be much worse off
Interest-only mortgages return to give more flexibility to borrowers
Five Questions On: GB Energy's new tariff
Bargain Hunter: Take your children on Eurostar on a £1 ticket
Simon Read: You're guilty until proven innocent when HMRC sends in the tax credit detectives
- 1 Kim Jong-un shows off airport designed by architect he likely had executed
- 2 Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
- 3 German ethics council calls for incest between siblings to be legalised by Government
- 4 Fifty Shades of Grey author E.L James's Twitter Q&A didn't go exactly as planned
- 5 Facebook rainbow profile pictures likely being tracked by social network
The moment a Queen's Guard soldier lost it and drew his gun at annoying tourist
Greece crisis: The wider lesson is that it’s time to abandon this failed experiment in currencies
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Pentagon accuses Russia of 'playing with fire' over nuclear threats towards Nato
They are neither a 'state' nor 'Islamic': Why we shouldn't call them Isis, Isil or IS
Tunisia beach attack: How can British Muslims respond to the latest outrages?
iJobs Money & Business
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...
£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...
Negotiable: Recruitment Genius: This extremely successful and well-established...
Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...
Day In a Page
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.
This recently-refurbished three-bedroom home has bi-folding doors that lead out to a decked seating area - ideal for alfresco dining this summer.
Well-located for coastal walks and popular restaurants, this detached four-bedroom home offers views over farmland, to the Solent, the Purbecks and Bournemouth.
If you love high ceilings, school conversions like this one are bang on the money. This two-bedroom flat is minutes from Burgess Park and the foodie haven at Borough Market.
Set within a church conversion in Bermondsey, this two-bedroom maisonette combines existing features, such as original arches and brickwork, with a contemporary finish.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.