Insurance firm abandons image-damaging mortgage loan cover

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.

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