UK consumer watchdog Which? has warned those arranging a personal loan over the telephone or internet to be more cautious as they may unknowingly buy expensive payment protection insurance at the same time.

Which? said that, when it searched for a loan, it found that more than half of the quotes received by telephone (24 out of 41 calls) automatically included payment protection insurance (PPI). A number of lenders quoted both with and without PPI, and just one quote did not include it at all.

The results were similar online, the watchdog said. It found that Lloyds TSB, Tesco and Natwest initially quote with PPI and the borrower has to click through to another page to be given a quote without it.

In contrast, Which? found that Norwich and Peterborough’s website allows borrowers to choose at the start of the process whether they want a quote with or without PPI.

PPI is not always suitable, yet our research shows that lenders are still extremely keen to sell it to us, commented Martyn Hocking, editor of Which? Money. By adding PPI to loan quotes automatically, people could be tricked into buying it regardless of whether they need it or not.

Which? is concerned about the issue of consumers unknowingly taking out controversial PPI policies as this type of insurance is not compulsory and income protection insurance can be a better option for many consumers.

In addition, both the UK’s Financial Services Authority and Office of Fair Trading have expressed concerns about the PPI market, and a number of lenders have been fined for mis-selling the product.