Investigation into PPI for loans ‘welcomed’

An investigation into payment protection insurance (PPI) has been welcomed by the Post Office.

Underhand sales tactics which see PPI costs added to a loan automatically were highlighted in research from Which?.

The research reveals that PPI can increase debt management problems by stealthily increasing monthly loan costs.

Post Office head of communications Claire Oldstein said: "Many customers have little understanding of PPI and some do not even realise they have this insurance in force."

"Others, who have been at the hands of aggressive sales tactics, can feel they have no choice but to take the expensive policy tied to a loan or credit card if they want their application to be accepted," she added.

The Post Office revealed that by not taking out PPI, which was often reported to be unnecessary, consumers could save thousands of pounds and complete loan repayments much quicker.

More than half of lenders questioned had PPI automatically included in loan quotes, according to the Which? survey, potentially increasing consumers’ debt management problems.

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