When Should You Buy Ppi With A Credit Card?

New enforceable measures outlined by the Financial Services Authority (FSA) are set

to compensate victims of the mis-selling of credit card debt insurance by lenders.

Payment protection insurance (PPI)

But the insurance is designed to prevent consumers from falling into debt if they are unable to work and earn the money required to keep up payments on their loan or credit card. So when should you buy PPI with a credit card?

The new FSA rules are applicable to all building societies, banks and other PPI providers who may have mis-sold their products to sometimes unwitting consumers.

Lenders may even be required to pay out compensation according to what the FSA has termed its "route cause analysis" measure. According to this, a lender that has already paid compensation to a large number of people regarding the mis-selling of PPI must also actively contact those who were targeted in the same sales method, but who haven't yet made a complaint.

The first point, then, is that the FSA isn't trying to prevent these sales but just ensure that consumers shop around for them so make sure that you do alongside a credit card comparison.

The Financial Ombudsman Service receives about 1,500 complaints concerning the mis-selling of PPI every week. Last year, the FSA ended the ability of lenders to offer single premium PPI on unsecured loans. It has also issued fines amounting to around 13 million to 24 firms and individuals for various failings in their PPI sales.

The FSA's latest raft of measures also requires that PPI lenders make sure that customer's complaints are redressed fairly and handled properly. It also outlines the most common failings found in PPI sales and helps firms identify why and when to analyse past complaints to identify areas of bad practice.

So the second point is, make sure that you're not being sold PPI without realising it. For example, ticking a box when making an application for instant decision credit cards could result in this.

The PPI industry has been quick to come to it s own defence, claiming that credit card PPI shouldn't be included in the measures due to the premiums involved being less substantial than found in other areas.

It's true that credit card PPI is one of the least expensive forms of PPI but it could still add up to a considerable amount so it's worth checking.

In any case, in response, the FSA has pointed out that, in 2009, there were 81,000 consumer complaints made against the mis-selling of credit card PPI.

The FSA's measures may be the final nail in the PPI coffin. Lloyds TSB has already stopped selling PPI and Barclays is set to follow. Other lenders are expected to pack in their PPI before the year is out leaving consumers with fewer options.

by: Justin Schamotta

POST COMMENT

Alaskan Welding Students Build Classroom For Course Credit Finding A Credit Counselor In Toronto Loans With Bad Credit-financial Help For People With Bad Credits Bad Credit Loans – Carved Out For Your Typical Circumstances Loans for People with Bad Credit - Helps You in Time of Distress No Credit Check Bank Accounts - An Urge to Revive Your Status Vital Information About Credit Cards Payday loans for bad credit- Hold payday loans in case of bad credit history Credit Collectors - Discover How To Reverse The Damage Done To Your Credit Report By Collectors Interesting Ideas Regarding Credit Card Debt Relief Free Credit Card Debt Help Why You Need A Good Credit Score Instant Decision Credit Cards - Locating The Ideal Value