The Citizens Advice Bureau is making a ‘super complaint’ to the Office of Fair Trading after publishing a report which shows that many people have been mis-sold their debt insurance. The report found that Payment Protection Insurance polices from several well-known mainstream lenders exclude cover from common problems like mental health problems that can stop people working.
Citizens Advice claims that PPI, designed to help people keep up repayments after losing a job, is being unfairly sold to people who do not need it or to whom it does not apply.
David Harker, Chief Executive for Citizens Advice, said: “At best the excessive cost for minimal benefits makes it bad value for many people; at worst mis-selling means the most vulnerable people are parted from large amounts of money under false pretences and left even more exposed to debt. This is particularly worrying at a time when personal debt levels are escalating.”
Purchasing PPI has always been a voluntary act, although Citizens Advice is claiming that many people have been sold a bad policy through high pressure sales and inertia selling techniques.
The report also highlights that even if people have been able to make a successful claim, the amounts paid out are often small and only serve to pay off the minimum payments for one year.
“These problems are not new – we first reported on them ten years ago. It is a scandal that in this time so little has been done to remedy them,” said David Harker.