Consumers ”Tricked” into Buying Protection Insurance

Consumers are being tricked into buying expensive payment protection insurance (PPI) when taking out a personal loan over the phone or on the internet, it was claimed today. Consumer group “Which?” said people are at risk of unknowingly purchasing unnecessary or unsuitable insurance as a result of some providers adding PPI as a matter of course during the sales process. Researchers applying for a loan with a number of firms found that more than half the quotes received by telephone automatically included PPI, while online sales revealed similar outcomes.

Only one provider did not include PPI on their telephone quote, with a handful of others quoting both. The product, which provides financial cover for people who find themselves unable to work through injury or ill health, is often sold on the back of loans, credit cards and mortgages. There are 20 m policies active in the UK.

But critics claim PPI is vastly overpriced, often sold to people who do not need it and difficult to claim on. The report by “Which? Money” says the Office of Fair Trading calculates that the value of payouts with PPI is only 20% of the total amount claimed for. Comparison with the motor insurance industry, where total payouts amount to 82 per cent of the claim, or household insurance where payouts amount to 54 per cent, reveals what bad value PPI is.

The “Which?” report points out that the product is not compulsory and for most people income protection insurance is a better option. Martyn Hocking, editor of “Which? Money”, said: “PPI is not always suitable, yet our research shows lenders are still extremely keen to sell it to us.”

“By adding PPI to loan quotes automatically people could be tricked into buying it regardless of whether they need it or not.” He added: “If you are taking out a loan, PPI is not compulsory so if you don’t want it ask the lender to remove it.”

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10 000 Job Cuts at Airbus

Airbus’ major restructuring strategy includes 10 000 job cuts, the French Prime Minister said on Tuesday, adding that his government will oppose any cutbacks in the form of layoffs. Asked if he could confirm reports that 10 000 of the company’s 55,000 jobs would be trimmed, the French Prime Minister told RTL radio: “That is what is envisioned in the plan. But we say – no layoffs. An answer must be found for each person.”

A day earlier, Airbus said an announcement on its long-awaited restructuring plan – called the “Power 8” turnaround strategy – had been delayed.

The European aircraft maker called off a works council meeting and news conference at which the strategy would have been unveiled on Tuesday, after French and German shareholders of parent company EADS failed to agree on where to build the A350 XWB – a planned rival to Boeing Co.’s mid-sized 787.

The French Prime Minister said the French President would discuss the issue with German Chancellor Angela Merkel during a meeting on Friday. “It's a question we want to address at the highest level,” the French Prime Minister said.

France’s two main financial newspapers, Les Echos and La Tribune, reported on Monday that the Airbus head was seeking to cut close to 10 000 jobs, sell off some production units and centralize assembly of the A350 in France, in exchange for agreeing to build a future revamp of the single-aisle A320 airliner in Germany.

Under the plan, France and Germany would each contribute between 3 000 and 4 000 of the job cuts, Les Echos said. Airbus and EADS have both declined to comment on the restructuring proposals or the discussions.

Date: 2016-01-03; view: 1031