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Newsletter

1.3m bought PPI after 'misleading advice'

By Sarah Engle, Thu 11 Sep 2008 - Published in Credit Cards

Over one million Britons took out payment protection insurance (PPI) after receiving "misleading" advice on the subject, a consumer group has concluded.

Which? reported that almost 1.3 million people thought taking out PPI was a condition of the credit card or would increase their chance of being approved for the loan.

In a poll carried out by the watchdog, 28 per cent of the 9.8 million people in the UK with PPI on their credit cards said they had been told by their lenders that taking out PPI was a good idea.

Credit card PPI is worth £970 million a year and Which? found each policy costs the average cardholder around £127.60.

It is indeed to protect the cardholder if they are off wok through illness or unemployment and can no longer make repayments.

Doug Taylor, a personal finance campaigner at Which?, said PPI was a "useless product" which "like a house of cards, won't give you the support you need" in the credit crunch.

The Financial Services Authority is due to consider PPI in a meeting of its executive board later in the month.