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Credit Card Insurance a Scam?UK residents are finding out that their credit card insurance called payment protection insurance isn’t all that great. The payment protection insurance is a high cost, and chances are you will never need it. So why then are so many UK residents buying the coverage? Statistics show that about a billion UK residents have the payment protection insurance and they are losing about 1.4 billion pounds a year on the insurance option. The problem is the credit card companies, while they offer the opt out option, are not keen to give it. When you call up about a regular question such as making a payment, trying to get a lower interest rate or other things you might like to ask, the person on the other end of the phone will try to sell you the payment protection insurance. However, their methods are underhanded. Here is a situation a person found themselves in: This person called up the company looking for a lower rate on the credit card. During the course of the conversation the person helping talked about the payment protection insurance. This customer service representative said “I’ll send you the information and that way you can decide if you want to take the insurance. We will not charge you until you have sent back the information in agreement.” Well that was very untrue. The customer got the information all right, but when this person checked the statement after not having sent back the paper work, she was being charged for the payment protection insurance. All credit card companies are like this. They are strong arming a person into talking about the insurance and sending out the information without telling the consumer they are being charged. The OFT and Commission are looking into the many complaints they have had in recent months regarding the PPI practices. However, this doesn’t make up for the lost money or the underhanded way these customer service representatives are “selling insurance.” Hopefully this warning will help you check your next statement. The insurance itself can be helpful if you want it or feel you will need it, but if you don’t want the insurance you could be paying out several pounds a year that is unnecessary and completely in the wrong. Payment protection insurance is in case you fall ill, need to miss work, or lose your job. It will help cover your missed payments during that difficult time. Back To Financial News June 2008 100 Percent Mortgages |
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