Call for SPASU to be banned

Paymentcare has called on the government to ban single premium accident, sickness and unemployment cover.

This comes on the back of an appeal from Citizens Advice to the Office of Fair Trading to launch a probe into the multibillion pound payment protection insurance industry.

Shane Craig, managing director of Paymentcare, says: “It’s no longer a question of profit. It’s sheer greed that drives banks and lenders to sell single premium cover where a lump sum is added to customers’ loans, rather than offering monthly paid policies customers can cancel at any time if they feel they no longer need them.”

The company has also called for the UK to switch to a US-style system to clean up banks’ mis-selling of loan protection cover in branches.

Craig says UK banks should be banned from selling PPI and ASU when signing a loan agreement to help protect vulnerable borrowers from astronomical policy charges.

He says: “Outlawing the selling of PPI at the point of sale – as they do in the US – will cut the unacceptably high incidence of mis-selling of expensive and often useless cover.”

Paymentcare last week launched an ASU product for unsecured loans. Offering cover per 100 of monthly benefits at 4.50 for full ASU cover, Paymentcare says this fills a gap in the market for consumers who need similar cover to that provided on their mortgage.

Craig says: “Many brokers come to us asking to offer our policies but while we could help them with mortgage payment protection insurance, there was nothing credible available for unsecured loans.”