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.
Debt in Britain: Numbers seeking help on how to cope with mounting bills goes up by more than half in three years
Bargain Hunter: BT improves its mobile reception with 'incredibly competitive' deals
Questions of Cash: Why was my case ignored by My Civil Service Pension?
Offset your mortgage and save thousands
Women to lose benefits from contracted-out pension scheme
- 1 Vladimir Putin says Russia will fight for the right of Palestinians to their own state
- 2 Ohio Democrat Teresa Fedor speaks out during abortion debate to reveal she has been raped – and is interrupted by laughter from Republicans
- 3 Germanwings plane crash: I have depression. That doesn't make me a psychopath
- 4 The West has it totally wrong on Lee Kuan Yew
- 5 The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Street preacher quoting from the Bible fined for calling homosexuality an 'abomination'
Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
The West has it totally wrong on Lee Kuan Yew
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...
Day In a Page
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.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
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
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station