8 February 2007
uSwitch.com has welcomed the news the Payment Protection Insurance (PPI) market has been referred to the Competition Commission for further investigation.
The announcement by the Office of Fair Trading (OFT) is, according to uSwitch.com, long overdue.
A recent study by the price comparison and switching website revealed consumers could be paying banks an additional £3,797 more than they need to when they take out a PPI loan, which is 478% higher than other providers such as Paymentcare.
Nick White, Director of Financial Services at uSwtich.com, said: "It's not surprising to see that the Competition Commission is now involved in this investigation as the high street banks and building societies currently account for 80% of all PPI policies sold."
Mr White said that this is because shoppers are not looking around enough for the best deal.
For example, a £10,000 loan taken out over a five-year period with the Bank of Scotland costs £11,939 in total. If PPI is included the figure rises to £15,736, an additional £3,797.
With Paymentcare, for example, PPI on the same loan would cost £656.
© 2008 Adfero Ltd
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