View more on these topics

Paymentcare finds lenders guilty of bad PPI practice

A report by Paymentcare has slammed high street lenders for failing to alert borrowers when personal loan fees include personal protection insurance, and that there is no obligation to take the cover.

The report was compiled after a series of mystery shopping exercises at lenders including Northern Rock, Lloyds TSB, Halifax, Egg and NatWest.

Adding PPI to the repayment of a loan can significantly increase the amount paid back and some believe the cover to be expensive.

Leigh Calder, spokes- person for Lloyds TSB, says: “We make sure our customers know what they are applying for. We have a policy that all customers have to sign two separate documents regarding PPI – once on the loan application and a separate document solely about PPI.

“We also have a 30-day cooling-off period where the customer can cancel their PPI without any extra cost to themselves.”

He adds: “With our PPI cover we offer positive job solutions. As well as paying cover when someone is made redundant, we also help to get them back into work by helping with CV writing.”

Paymentcare found that when applying for a personal loan of 7,500, each lender involved offered the initial quote inclusive of PPI.

The exercise found NatWest charges an additional 42.70 a month on top of the standard monthly repayment, while Egg came in at 37.84.

Shane Craig, managing director of Paymentcare, says: “On each occasion the mystery shopping team was left thinking that they would be at a distinct disadvantage if they did not take out the additional insurance – yet there was no attempt made at the point-of-sale to establish whether the cover was appropriate.

“The lenders covered in this mystery shop are guilty on two fronts: for giving the first quote with PPI, as it is an inflated figure and not one that the consumer would necessarily want, and for omitting to establish the eligibility of the applicant before doing a hard sell on the loan.”

Calder adds: “We at Lloyds TSB believe PPI is important cover, but we give the customer the option to decide whether they need it or not.”


em-financial still waiting for phone call from TMB

From Guy Garrard How refreshing to read Nigel Payne’s response to Simon Mouncher’s letter in Mortgage Strategy (November 14). The Mortgage Business is “firmly behind packagers” and sees them as being “closely linked” to its growth. What a shame then that as a major UK packager all of five minutes’ drive from TMB’s Chester offices, […]

House prices will remain stable in 2006, says Propertyfinder predicts that interest rates and house prices will remain stable throughout 2006.Jim Buckle, managing director at, says: The dark days of late 2004 and early 2005 for the housing market are well and truly behind us. Propertyfinder.coms research tracking buyer and seller confidence is a good predictor of housing transaction volumes and shows […]

em-homeloan launches range

em-homeloans is offering a range of products in conjunction with lending partner First National. em-‘s branded lending division willoffer brokers a light-to-medium, two-year fixed rate at85% LTV with a rateof 6.59%; a two-year discount at 75% LTVwith a rate of 6.44%; and a first-time buyer 95% LTV two-year discount with a rate of 5.94%.

Equity release market still constrained

There have been plenty of column inches devoted to equity release products over the last five years. The market seems to have great potential, which remains largely unrealised. The barriers to its growth have been far more significant than many predicted, with lenders and borrowers remaining cautious.

Tree - thumbnail

The politics of healthcare

Healthcare is already one of the key battlefields in May’s general election, with each of the main parties committing to deliver improvements to the NHS and public health.


News and expert analysis straight to your inbox

Sign up