Payment protection insurance is a financial product that functions perfectly. However, due to the manner it was mis-sold, consumers could not make a claim for their benefits. As a result, millions of UK consumers purchased an insurance policy they did not need.
To avoid purchasing similar products in the future, it would be best to take note of these three things.
Read the Terms and Conditions
The fine print indicates consumer or insurance beneficiary requirements. Therefore, for any financial product, it is wise to spend time understanding this area before signing the contract. Bank employees rushed most mis-sold customers to prevent them from reading the fine print. Ask your employee to give you the terms to make sure you’re not purchasing something you cannot use in the future.
Institutions Cannot Require the Purchase of Brand-Specific Items
Banks can require consumers to purchase payment protection products and other items that can help secure any financing. However, they cannot require borrowers to purchase a specific brand of insurance policy or financial product. That product is automatically mis-sold because no single insurance policy can address a consumer’s need.
Alternatives to Loan Security
If there is a way to secure your loan through your home’s equity or property collateral, then these are better alternatives than taking out a payment protection insurance policy. Your contract with the bank ensures you will get the loan without any mis-sold product, and if you repay it on time and in full, you won’t have to deal with repossession and losses.