Around two million consumers may have been sold PPI despite being ineligible for the products, research suggests.
According to consumer watchdog Which?, a third of policyholders who have taken out cover in the last five years may fall foul of at least one ‘significant exclusion’ of the policy.
The firm, which carried out the study as part of its PPI mis-selling campaign, is calling on consumers to check their policies and make a complaint if they discover they may have been mis-sold the product.
Doug Taylor, Which? personal finance campaigner, says: “We've always known that people were being mis-sold PPI, but we were still amazed to discover the scale of it.
“It appears that salespeople are chasing their commissions, their bosses are chasing profits - where's the sense of responsibility to the customer?
‘If you have a loan and think you might have been mis-sold PPI, now's the time to fight back. Compensation could be just a letter away.”
According to Which?, people who are self-employed or on a fixed-term job contract are among those who may be ineligible for cover under the terms of the policy.
It adds many people aged 65 and over, or people who might claim for absences relating to pre-existing medical conditions, also may not be covered.
“We estimate that around six million PPI policies - about a third of the market - were attached to loans at the end of 2006," Taylor says.
Daniel Barnes, editor of myfinances.co.uk says the idea that PPI has been mis-sold “comes as no surprise” and calls for PPI to be “unbundled” from larger products.
“Action is needed sooner rather than later to clean up the sale of PPI so that consumers truly understand the product they are buying or can opt out and take a product that actually provides them with real financial protection,” he says.
“Some in the industry have themselves called for the sale of PPI to be unbundled from larger financial products in order to increase competition between providers and reduce the cost of PPI.
“The sooner this happens the better it will be for consumers.”
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Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected