Take advice before buying PPI, urges consumer magazine

By MoneyhighStreet Staff. Published on September 20, 2008 This post currently has no comments.

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Consumers should take professional advice before taking out a payment protection insurance (PPI) policy in the current economic climate, Which? has warned.

The latest review of the PPI sector from the Financial Services Authority found that sales practices of many small firms breached rules and said this could lead to people being miss-sold cover.

Lucy Widenka of Which? said that these inconsistencies in the sector coupled with the economic downturn mean that caution should be exercised when purchasing PPI.

She explained: "In the current economic climate we would emphasise that consumers should not to feel obliged to take out any insurance alongside another financial product until they have sought independent advice about what they need to protect not just one debt but all their finances.

"If money is tight, you would be better off using money you would have used on credit card PPI and spending it on independent financial advice and more robust protection for your entire finances."

Following its review, the FSA pledged to clamp down on PPI miss-selling with larger fines for firms found guilty of wrongdoing.