An investigation into payment protection insurance (PPI) revealed that some lenders generate revenues of £1,200 on policies that cost as little as £20 to sell. The Competition Commission working paper says that profits earned by lenders from PPI, an estimated £1.4 billion in 2006, has supported an otherwise loss-making personal loans market in recent years. A website to trace lost or forgotten accounts was launched this week. The free site, mylostaccount.org.uk, covers 42 banks, 59 UK building societies and NS&I products, including an estimated £1.02 billion in unclaimed Premium Bond prizes. Next year the Government will start distributing cash in some dormant accounts to charities.
Energy companies have been told to take complaints more seriously by a consumer watchdog after research found that 97 per cent of customers surveyed were dissatisfied. Energywatch says that it takes an average of seven months and seven calls to sort out problems. It called on Ofgem, the industry regulator, to toughen up complaints standards. More than a million homeowners whose fixed-rate mortgages end this year would struggle to meet repayments if borrowing costs increased. The Financial Services Authority says that 1.4 million people fall into two of its three identified risk categories of a long mortgage term, high loan-to-value ratio and high loan-to-income ratio. Indebted consumers who manage repayments with an individual voluntary arrangement (IVA) will be protected by new industry standards that came into force yesterday. The measures, announced by the British Bankers’ Association and agreed in conjunction with IVA providers and the credit industry, cover the information given to consumers. People in debt can set up a court-approved IVA with creditors.