New rules will offer future for PPI
There has been much debate over Payment Protection Insurance (PPI) after it was found that the product was missold to hundreds of thousands of people in the UK. Whilst the product can be a great financial protector for those buying it in the right way, missold PPI cases have caused a huge amount of negativity. However, new laws are coming into force, offering those taking out Mortgage Payment Protection Insurance (MPPI) and other PPI products, increased security against selling.
The new rules are aimed at providers of PPI not being able to force products upon vulnerable people who are trying to take out loans and credit agreements. One of the leading reasons why so many cases of missold PPI arose is because, when taking out much needed loans, consumers were advised that PPI was necessary. However, this was not correct, and the purchase of PPI is optional.
With this in mind, PPI can no longer be sold alongside a mortgage or credit agreement, and a seven-day period must have passed between the loan sale or personal PPI quote and the actual selling of insurance. Single premium PPI policies can no longer be sold, whilst providers of PPI must make clear to customers that the protection is optional and must offer full transparency of prices.
The stigma of PPI is likely to remain with customers for a long time, but the industry is taking steps to ensure that product can offer people financial support in times when they most need it.