The warning comes after TSS contacted the four main banks and asked for a quotation on a £5,000 loan,

taken out over five years. The investigation found that quotations gave repayment figures which

incorporated Payment Protection Insurance (PPI) premiums with no mention that the insurance had been

included. This contravenes the rules in the Financial Services Authority handbook which state that banks

must offer customers quotations with and without PPI and clarify that the insurance is not compulsory.

The investigation found that PPI premiums could add up to £1,200 extra to the total repayment figure,

which is approximately 16% of the total amount payable. The banks also failed to point out that PPI could

be purchased separately elsewhere.

Commenting on the findings, a spokesman at TSS said: "The investigation gives cause for concern. When

the insurance premiums are included in the initial quotation, consumers may not be aware that they are

incurring optional and unnecessary costs.

"Although this type of insurance can be useful, it does add substantially to the total repayment figure.

Consumers need to be aware of what they are purchasing. If the consumer decides to take Payment

Protection Insurance then it is important to know what the insurance costs and what cover it provides. This

should be explained in plain terms at the initial stages of the loan application. That way a consumer can

make an informed choice based on their individual circumstances."

Douglas Covey & Co can provide a free check on your agreement to establish if you have been sold PPI

call 02890 436661 for a no win no fee claim.