The protection provider reported receiving nearly 2000 letters from customers using an online template to try and seek compensation against a PPI policy.
All of Paymentshield’s mortgage payment protection products are however not single premium protection products involved in the mis-selling scandal.
In February 2012 alone the protection provider received around 323 template letters, representing 13 letters per working day.
Tim Johnson, chief executive of Paymentshield, said: “This highlights the confusion that exists over PPI. Unfortunately, the whole PPI miss selling scandal has left many consumers wary of taking out protection products.”
The figures from Paymentshield indicated that consumers do not make the distinction between loan-related PPI paid for with a single premium added to the loan and products that have an ongoing monthly contract like MPPI and income protection.
Johnson added that it was a sad fact that we were living in uncertain economic times.
He said: “With unemployment still on the rise it’s important that people consider appropriate protection for their circumstances should they be unable to work due to accident, sickness or unemployment - which could happen to any of us.
“The misconception that all protection products are bad products could increase the huge protection gap and clearly people are confused.”
Last year Paymentshield paid out over £20m in claims to people needing the financial support of their MPPI or income protection policy.
“New rules from the Competition Commission which come into effect from the 2 April are designed to provide customers with additional peace of mind that they will not be pushed into taking out products that they don’t want or don’t need.
“Existing customers with protection products will also start to receive annual statements over the next year which should encourage them to more regularly speak to their insurance broker or financial adviser to help find them review their protection policies against their current circumstances.”
