Homebuyers urged to seek independent financial advice

19-Sep-2008

Borrowers looking to get on to the property ladder should seek independent financial advice before taking out insurance products, consumer group Which? advises.

Personal finance campaigner Lucy Widenka says people such as first-time buyers taking out mortgages should be looking for "robust" protection for their entire finances.

She explains that payment protection insurance (PPI) is often purchased alongside other products such as mortgages, loans and credit cards.

"However, in the current economic climate we would emphasise that consumers should not to feel obliged to take out any insurance alongside another financial product until they have sought independent advice about what they need to protect - not just one debt but all their finances," Ms Widenka comments.

The Financial Services Authority states in its September 2007 review that there have been improvements in firms selling PPI, but some still do not treat customers fairly.

It found evidence of poor practices such as not explaining PPI clearly, not tailoring information to the consumer and failing to ensure they would actually be eligible to claim.

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