Payment protection insurance

BBC Radio 4's Money Box Saturday, 31 January at 1204 BST On Radio 4 and Online Programme transcript (14 pages) 31 January 2009

Banks and other lenders will soon face tough curbs on their sales of lucrative loan insurance called payment protection insurance (PPI).

In 2007 consumers spent more than �4bn on PPI which is supposed to repay borrowers' loans if they fall ill or lose their jobs.

But sometimes the policies do not pay out.

The Competition Commission says lenders will no longer be able to sell PPI at the time they grant a loan or for seven days afterwards.

The Commission says that customers will have more time to shop around if they choose to take out loan insurance and that this will lead to lower prices and a better deal.

But the Association of British Insurers has warned that the Commission's plans could leave borrowers without the necessary cover.

We hear from Peter Davis deputy chairman Competition Commission and also from Simon Burgess, managing director of British Insurance and Stephen Sklaroff, the director general of the Finance and Leasing Association.

Payment protection insurance

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Capital One says the rises are due to "the increased risk of lending"

Lower base rates may be good for some, but credit card holders are now paying, on average, more in interest than six months ago according to comparison site Uswitch.

Capital One, for example, has recently written to customers advising them of an APR increase of up to 6.9 percentage points.

Samantha Washington investigates why rates are going up, and finds out where good deals can still be had.

Credit card interest

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Mohammed in Leicester had to pay �1,000 to have his claim processed

Some drivers are finding that they have invalidated their insurance cover without realising it.

As credit gets tighter, you may choose to make changes to upgrade your old car instead of buying a new one.

But if you make significant improvements, insurers will expect to be told so your premium can be adjusted accordingly.

If you fail to do so, in extreme cases you may be left without any cover at all.

Bob Howard reports.

Car insurance

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Savers may get some money back if over 50% agree to proposals

Thousands of people in Northern Ireland face losing their savings after the collapse of the Presbyterian Mutual Society.

The Mutual, which was placed in administration last November, has assets of �300m and about 9,500 shareholder accounts.

The collapse of the Mutual has become a big political issue and Prime Minister Gordon Brown has been asked by Northern Ireland's Deputy First Minister Martin McGuiness to help savers financially.

We ask Kevin Magee, the BBC's Northern Ireland business correspondent, what choices savers have as they vote on the future of the Mutual.

And we explore why it was not regulated by the FSA and savers not protected by the Financial Services Compensation Scheme (FSCS).

Presbyterian Mutual Society

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Other news

Depositors with Kaupthing, Singer and Friedlander on the Isle of Man face a further wait before any compensation can be paid.

A petition to wind up the bank has been adjourned for a third time and the court is due to reconvene on 19 February.

The Isle of Man Treasury is proposing an alternative system of payments to liquidating the company.

Depositors were waiting for it to be liquidated in order to activate the islands' depositors compensation scheme

Other news

BBC Radio 4's Money Box was broadcast on Saturday, 31 January 2009 at 1204 GMT.

The programme was repeated on Sunday 1 February 2009 at 2102 GMT.

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