Consumers mislead in taking out Payment Protection Insurance on credit cards

11/09/2008

Research has found that thousands of credit card consumers have been mislead into taking out payment protection insurance on their credit cards as they were under the impression that their credit card application would be more likely to be accepted.

PPI insurance is taken out to cover the borrower if they are unemployed or fall ill. Though the insurance is great for peace of mind, it has come under hard criticism as being mis-sold to many consumers and expensive.

“Credit card PPI is a modern day snake oil - it’s a useless product, expensive and poorly designed. As the credit crunch continues to take hold, people want to be protected and have peace of mind, but credit card PPI, like a house of cards, won’t give you the support you need.

“In this time of economic uncertainty, people are effectively throwing away £970 million each year, when they should be encouraged to seek independent financial advice about protecting their finances as a whole,” said Doug Taylor at Which.