IVA & Debt Consolidation Advice

Consumers have been warned that PPI may be an expensive way to solve concerns over debt management.

For many people, Payment Protection Insurance (PPI) seems like a good method of debt management, but according to three industry specialists, it could easily cost more than it is worth.

Moneyfacts, Defaqto and moneysupermarket have combined forces to produce comparable research on PPI across premiums for loans, mortgages and income protection.

The results reveal that customers are not getting a good deal from the product, claimed all three companies in a joint statement.

For mortgage and income protection, insurance that many people feel will ensure adequate debt management if the worst should happen, the highest premiums were found to cost between four and five times more than the lowest quote – suggesting that many customers are being overcharged.

"The big players have already had their knuckles rapped by the Office of Fair Trading for their anti-competitive practices and these tables clearly evidence how consumers are being ripped off," said Simon Burgess, managing director of British Insurance Limited.

Experts have advised that customers check the small print of PPI before entering into a contract that they believe will give them a good level of debt management, as recent reports have highlighted problems of product mis-selling within the PPI sector.