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OFT warns of loan protection rip-offs; MONEY MAIL

0 Comments | Daily Mail (London, England), The, August 9, 2006

Byline: JAMES CONEY

EXPENSIVE loan insurance cover is being flogged to consumers who are getting poor value, bad information and often have no need for the protection.

A damning report from the Office of Fair Trading has revealed that payment protection insurance (PPI) is being bought by consumers who never considered they needed it before taking out an unsecured loan, mortgage, store card or credit card.

They are rarely told about exemptions that exclude them from ever making a claim, have no idea of the true cost of the cover and are not given suitable product information.

The confusion over what they are buying is compounded by providers using different terms to describe identical products.

Meanwhile, product providers are making a mint from the cover because the cost of claims is a tiny proportion of the [pounds sterling]5 billion they rake in annually from premiums.

The OFT also found that the difference in prices of products had no relation to the quality of them, with some policies costing [pounds sterling]16 almost identical to those costing [pounds sterling]40.

Its report followed a complaint submitted by Citizens Advice in 2005, which alleged that features of the PPI market were seriously harming the interests of consumers. PPI is supposed to protect borrowers’ ability to maintain repayments for a loan and should help them avoid getting into debt.

It is supposed to pay out when they suffer an accident, illness or lose their job.

While the OFT says it did find some good practice with regards to providing clear information on PPI prices, this was not true of the whole industry.

It was not uncommon to see marketing literature with no costs listed at all.

Almost nine out of ten unsecured loan providers included the cost of PPI in the quote for a loan.

One quarter of consumers questioned were given the impression by a salesman that taking out PPI helped their application for credit. Despite its unsuitability and expense, about 7.5 million PPI policies are sold each year.

The insurance is a massive earner for brokers and intermediaries, who often take commission equivalent to 60 per cent of the product price, the OFT claims.

Simon Burgess, managing director of insurance brokers British Insurance, who has been campaigning for reform of the PPI market, says: ‘Commission rates are being used by firms to inflate their profits and do not represent good value for consumers.’ The OFT is to hold a feedback session on its report at the end of the month and will then outline any action it plans to take.

This is likely to involve the OFT encouraging companies to voluntarily improve the products they offer to consumers and set up a code of conduct.

If companies refuse to do this, then a full probe and recommendations could be handed to the Competition Commission or the Financial Services Authority.

j.coney@dailymail.co.uk

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Scotch and waterside; Property Mail Houses that would be a real tonic for whisky drinkers

0 Comments | Daily Mail (London, England), The, Sept 2, 2005

Byline: JENNY SHIELDS

IT’S our national drink, but enjoyed in every corner of the world.

And while the Irish, Americans and Canadians produce whiskey, bourbon and rye, nothing tastes quite like the malts and blends distilled in Scotland.

For anyone who appreciates the distinctive flavour of Islay malts, Loch Gorm House could prove a real temptation.

Sited a short stroll from the Bruichladdich Distillery, it stands by the shores of Loch Indaal, across the water from Bowmore, the island capital – and home to another famous malt.

The house, described by Judith Harper of selling agent Savills as ‘quintessentially Scottish’, is of dressed stone with a slate roof and graceful chimneys.

On the ground floor is a reception hall, drawing room, dining room open plan to the kitchen, sun room, utility room and a fifth bedroom or study.

On the first floor is a master bedroom with en suite bathroom, three more bedrooms and a family bathroom.

At the rear of the property is a large, L-shaped outbuilding comprising a byre, stabling, hayloft and garage. Useful though the outbuildings are, they could also be converted into a dwelling, possibly for a holiday let.

Offers over [pounds sterling]370,000 to Savills in Glasgow.

Talisker, the only single malt made on the Isle of Skye, is another world-famous name. The distillery was founded in 1830 and just a couple of miles along the coast, at Portnalong, is a good-sized building plot for sale, complete with planning permission for a single or one-and-a-half-storey house.

Offers over [pounds sterling]45,000 to Innes and Mackay, Inverness.

Highland Park, the world’s most northerly Scotch whisky distillery, overlooks Kirkwall, Orkney’s capital. In Old Scapa Road is Mountblair, a detached family home.

The property has a sitting room, kitchen/dining room with adjoining utility room, two bedrooms and a bathroom on the ground floor.

Upstairs are two more bedrooms, with views of the distillery, and a shower room
home water distiller