Because of the uproar over mis sold PPI in the wake of people finding out how they had been cheated by banks into purchasing a policy when taking out a loan, mortgage or credit card, many are now calling for a ban on PPI altogether.
Although this may seem a good idea, especially to those who are trying to reclaim PPI after being cheated so callously by financial institutions, many experts suggest this would not be the way to go.
The reasoning behind banning PPI is to foster competition between banks in relation to instruments like loans, mortgages and credit cards. PPI is essentially a good thing but has earned a bad reputation now because of the way unscrupulous bankers used it to shore up their profits and to make sales to get commissions, promotions and pay increases.
PPI is meant to protect those who face emergencies like a sudden illness, an accident or joblessness by making monthly installment payments on their behalf for a period of up to a year. It is true that almost two million if not more were affected by being cheated by bankers, but many people were not cheated and were genuine candidates to get a policy.
The people who bought these policies and met all the requirements will state that PPI has come to their rescue when any of the emergencies mentioned above happened with them. But to ban PPI outright would mean people would think twice about taking out a loan for example fearing that an illness and an inability to pay back in the absence of PPI could add to financial problems
