A government department has said that it is concerned over whether Payment Protection Insurance (PPI) really helps people who are in debt.

The Office of Fair Trading (OFT) has announced its intention to refer the matter to the Competition Commission and has opened the floor for discussion.

Although PPI can protect a borrower's ability to meet loan repayments if they have an accident or are made unemployed, there are concerns over how some providers manage the cover.

"Following the work we have undertaken it is clear that many consumers are failed by PPI – insurance which gives them a poor deal and often less protection than they think," said the OFT's chief executive John Fingleton.

"There is limited evidence the industry is taking steps to improve the situation, but we believe they will not make major improvements to competition in the market."

Those who are struggling to make repayments on their debts often find it helpful to simplify their finances with a debt consolidation loan.

Posted by: Peter Kudela
Date: 20th October 2006