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PPI Villains
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Heroes and Villains - Scottish and Southern Energy vs. PPI pushers
Hazel Cottrell
hazel.cottrell@consumerchoices.co.uk
No-one escapes the Heroes and Villains column. The good, the bad and the ugly providers will find themselves here, praised for their excellence or named and shamed for their misdemeanours...
Hero – Scottish and Southern Energy
Let’s hear it for the rebels!
With energy suppliers increasing their prices left, right and centre this year, it’s nice to see that one company is at least entertaining the possibility of price cuts in the future.
Last week Scottish and Southern Energy (SSE) said that it is considering slashing fuel prices in the New Year. It said its reasons for this would be to keep prices in line with reductions in wholesale energy prices, to assuage politicians and regulators and to retain consumer confidence.
Indeed, it seems only fair that they do pass on the decline in wholesale costs as soon as possible. Oil prices have been falling since July yet we the customer have seen no reduction in our energy bills!
While no firm promises were made, by breaking away from the herd (whose only announcements seem to come in terms of price increases), Scottish and Southern have put pressure on the rest of the “big six” suppliers to declare their plans for the future.
(A recent energy customer satisfaction report found that 41% of customers are unsatisfied with their energy supplier, compared with 33% in October last year. Although not perfect, Scottish and Southern Energy did win the title of best supplier for the fifth consecutive year, with 69% of its customers satisfied.)
Hopefully now we will see rival energy companies announcing plans for price decreases too, and fingers crossed they will all follow through with the real price cuts we all need…
In another heroic act (well, heroic by the energy companies' standards), SSE said that later this month it will reduce the price of its gas for prepayment meter customers by 3%. This will not completely close the price gap between them and customers paying by standard credit terms, but it will reduce it by around £25 a year. A decent start at least…
Compare Energy Suppliers >>>
Villains – PPI Pushers
Yes, I know the mis-selling of payment protection insurance (PPI) is old news, but last week, these villains finally got their comeuppance on a large scale!
Hard selling PPI is most villainous because most banks, mortgage and credit card companies face little or no competition when they push policies at the point of sale. Plus, their quotes frequently fail to clearly show that the PPI policy is not part of the standard credit product.
Fines have previously been doled out to the worst offenders - those institutions ripping off consumers by not making it clear that the insurance was optional and in one case, actually training its staff to put pressure on customers when they queried the inclusion of PPI in their quotations.
But now, the entire PPI industry is being reined in!
Competition watchdog, the Competition Commission (www.competition-commission.org.uk) has initiated a ban on the sale of payment protection insurance alongside credit products such as loans, mortgages and credit cards.
The Commission plans to stop companies from selling you PPI until 14 days after you have taken out the loan, credit card or mortgage. This should pave the way for a fairer, more open PPI market, giving you the time to shop around and compare prices from all sources including independent PPI providers.
Predictably, banking and insurance groups have slammed the Competition Commission’s decision. They argue that in these uncertain times, the public needs PPI to cover their credit agreements in the event of job losses.
Yes, the public may need PPI, but surely they should have the right to choose where and when they buy it and should not have it forced upon them.
I say hooray for the Commission for enforcing more transparent PPI practices. However, I would warn you to watch for the downside. Villains will be villains and there is no doubt that these financially wounded companies will find a new way to take your money… watch those loan rates rise!
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