In a report into the PPI market, Defaqto predicted the number of complaints would rise to levels not seen since the endowments mis-selling scandal of the last few years. The study found many people were unaware they could shop around for insurance products or did not know where to find alternative quotes.
However, Defaqto warned the rise in complaints and regulatory clampdown could mean consumers face increased costs as lenders attempt to compensate for the loss of income generated by PPI. An increase in rates and charges on loans, credit cards and other products could even lead to the introduction of compulsory bank charges.
David Quick, managing director of CETA, agreed the potential for a large number of complaints was great once the issue gathers momentum, but added: “We must differentiate between PPI and mortgage payment protection insurance (MPPI). It’s the lumping together of these products that is a problem.”
Report author and Defaqto’s head of insurance, Brian Brown, said: “Consumers are becoming more aware of all the problems starting to surface in the PPI market. Forthcoming regulatory pressures from the Competition Commission and the regulator will bring PPI further into the limelight this year. If the PPI industry is to rebuild consumer confidence, it must act now and widen public understanding of PPI through greater transparency.”
