In the latest step against PPI mis-selling, Banks and Loan companies have been banned from selling Payment Protection Insurance (PPI) within 7 days of a customer signing up for a new loan or credit card.

This breathing space will stop the fear based sales of PPI, which is often sold on the basis that it will enhance the chances of a loan being approved and must be taken then and there.

The Competition Commission has announced that the new rules will come into force next year. They have also stated that ‘single premium’ PPI, where the insurance premium is added onto the loan, accruing thousands of pounds in extra interest, will be banned completely.

PPI is designed to meet loan or credit card repayments in the event of unemployment or illness. It’s not the product, but the way banks sell it that’s become a big problem.

Thousands of people have been pressured into buying PPI policies which can cost up to 10 times more than arranging cover elsewhere.

Often the insurance is useless as lenders don’t always check that customers meet the policy criteria, for example people who are Self Employed or have a pre-existing medical condition have exclusions placed on them. It comes as no surprise that lenders can make more profit from selling PPI than the loan or credit card itself.

If you have ever had PPI with a loan? You can RECLAIM £1,000s

Take the test to see if you were mis-sold Payment Protection Insurance