Last week we reported on how the Financial Services Authority (FSA) was planning to investigate the sale of Payment Protection Insurance (PPI) policies, following a large number of complaints from consumers who have been sold such a plan only to find that they are unable to claim on the policy when it was needed, due to the fact that they were ineligible for the benefits the policy provided.

PPI is often sold to borrowers who apply to take out a secured loan or mortgage and is intended to cover the monthly repayments on the loan, for a limited period, should anything happen to the applicant, such as accident, sickness or unemployment. Very often, the loan applicant is sold the policy at the same time as the loan, without being informed that they are able to shop around for this type of cover rather than taking a policy with the lender, which can often be significantly more expensive than an alternative provider.

In fact a recent report from the competition commission revealed that borrowers in the UK have been hugely overcharged for PPI insurance and if individuals had shopped around for the protection, rather than accepting the lender’s quote, they could have saved themselves approximately £1.4 billion over the last year alone.

In a bid to offer assistance and clarification to customers, the FSA has produced comparison tables, which it claims, should help borrowers to obtain a better deal on PPI and also get the cover they actually need. But many experts have complained that the comparison tables are far too complicated, with too many variations on policies to be of any benefit to those who use them and claim that they are more likely to cause further confusion rather than clear matters up.

A spokesman for British Insurance commented “I welcomed the announcement of the FSA launching this service, but these indecipherable tables will be of no use to consumers at all.”

If you are unsure about the type of protection you require for any loans you may have, you should take independent financial advice from a suitably qualified professional who will help you through the minefield of PPI.