PROSPECT HEIGHTS, IL: Household International has discontinued a
controversial type of homeowner's insurance after a year-long campaign
by a national community group.
"Image played a role in the decision," admitted Craig Streem, VP
corporate relations and communications.
Household joins Citi-Financial in dropping the controversial product
called single-premium credit insurance, which covers real-estate-secured
loans. The insurance makes mortgage payments for a borrower if he or she
becomes ill or dies. Consumer groups have said it is overpriced and
takes advantage of unsophisticated borrowers. CitiFinancial and
Household had been the two largest lenders offering the product.
The Association of Community Organizations for Reform Now (ACORN) has
campaigned for Household to drop the product for a year, said Lisa
Donner, ACORN's single-premium program coordinator. Its PR efforts
included demonstrations outside Household offices in 25 cities, filing
complaints against Household in 10 states, and pushing for local
legislation to ban the product.
"We think Household's decision clearly comes as a result of our
pressure," said Donner. ACORN did not use a PR agency in its
Household's agency of record is Edelman, but Streem said Edelman was not
involved in the decision. Streem said the decision was chiefly
influenced by its discussions with The National Community Reinvestment
Coalition (NCRC), a Washington, DC-based group. Earlier this year
(PRWeek, April 23), Household promoted Streem to his current position
from his post as head of IR. The finance company said at the time that
it wanted to boost awareness of its brand.