Responses to a Competition Commission survey revealed that those who rejected 'bundled' PPI in favour of a product from an independent provider were deemed to be of greater risk than those who opted to go all in.
The Competition Commission concluded that lenders viewed consumers who search for their insurance product in this way as 'more likely to make a claim than customers who purchase PPI when applying for credit’.
“Lenders are already closing their doors to new customers for credit and now they’re admitting they’re universally suspicious of anyone who purchases PPI separate to a loan," commented Simon Burgess of British Insurance.
He continued: “Lenders will use any-old excuse for why they blatantly profiteer from customers. If they’re happy to force PPI cover on someone who takes out a loan with them, why would the profile of that customer be different when buying on a standalone basis?"
“It’s also hypocritical, these same lenders are happy to push their home, motor and travel products onto consumers en-mass without scrupulous questioning so why are they so afraid to do it for PPI?”
The Competition Commission has been investigating the Payment Protection sector since February 2007 and will publish its provisional findings and remedies in May 2008.
