Bankers reject unsecured loans insurance proposal

Category: Loans
Date: 11/14/2008 10:45:52 AM

Proposals to change the way payment protection insurance (PPI) is sold have been dismissed by bankers.

The Competition Commission (CC) has recommended that lenders by unable to sell the policies to borrowers within 14 days of an unsecured loan being taken out.

PPI is often offered in order to protect against consumers becoming unable to afford repayments.

But the CC has stated that many borrowers do not realise they can shop around for policies from other providers.

And it has proposed a ban on their sale within the first two weeks, although it recommended that consumers can still contact the lender within 24 hours.

Criticism of the recommendation came from the British Bankers' Association, which described it as "very bad news for customers".

"Coming on the heels of news of approaching two million unemployed it is totally without conscience to encourage people to borrow without back up," the body added.