Commission upholds PPI sales ruling
A ban on the sale of payment protection insurance at the same time as credit cards, loans and mortgages moved a step closer today.
Providers will instead have to wait for seven days before they can contact customers to sell them the insurance after the Competition Commission upheld an earlier ruling it made on plans for a point-of-sale prohibition.
The decision follows an appeal by Barclays, which argued that the proposed ban was not justified by the evidence collected by the Commission and failed to consider the inconvenience that could arise for consumers.
The Commission is also banning the sale of single premium PPI policies, in which the cost for the entire term of the policy is paid upfront and usually added to the debt being taken out.
It is also introducing a package of measures to boost competition in the market, including personal PPI quotes for consumers, annual statements on the cover and better information to make it easier for people to shop around and switch provider.
The Commission was ordered to reassess its plans for a point-of-sale ban after the Competition Appeal Tribunal said the watchdog had failed to take into account the impact the ban would have on consumers.
PPI covers repayments on credit products if the borrower is unable to make repayments due to accident, sickness, unemployment or death.
It is sold to cover a variety of financial products, but more than 90% of PPI sold in the UK relates to unsecured personal loans, credit cards, mortgages or secured loans.
The ban does not cover PPI sold in relation to repayment on shopping through home catalogues.
Inquiry chairman Peter Davis said: "We found that many customers would place very significant value on being given the time and space to choose the right PPI product - or indeed to decide that PPI is not right for them.
"We also found that a significant number of customers appreciate the convenience of buying PPI instantly at the point of sale of credit. Overall we concluded that PPI providers are overstating the loss of convenience that would result from the introduction of a prohibition on selling PPI during the credit sale."
Mr Davis added: "All customers of course will appreciate the lower prices for PPI and the greater choice we expect to result from more competitive PPI markets."
The Commission will now invite comments on its provisional decision before publishing its final verdict in July.
The British Bankers' Association said it was "very disappointed" the Commission had decided to pursue the point-of-sale ban.
A spokesman said: "There is a real danger that this will result in fewer people taking out PPI, leaving them with no protection if they lose their job.
"Payment insurance provides protection and peace of mind to many customers and we will be making the point to the competition authorities as we continue to work with them to make improvements where necessary."
Barclays also said it was disappointed by the Commission's decision.
A spokeswoman said: "We still maintain that to prohibit PPI being sold at the point of credit sale and for a fixed period afterwards will limit rather than enhance customer options and will result in customers being exposed as unprotected."
She added that a quarter of all people who claimed on PPI policies did so in the first 90 days.
Nick Starling, director of general insurance and health at the Association of British Insurers, said: "The ABI will continue to move forward with its members and regulators to ensure the proposed changes in the Competition Commission's Provision Decision Report work to (the) benefit of consumers."
But he added that the group still did not think the ban on selling PPI at the point of sale made sense, as this was the time when people should be looking to take out cover.
Bargain Hunter: Getting your hands on these baby goodies is child's play
Problem gambling: Amid heavy advertising and a surge in remote sports betting, more and more 16 to 24-year-olds are now seen as 'at risk'
10 tips for taking out a personal loan
The HiFX guide to managing corporate foreign exchange and international payments
The Cyprus dream becomes a nightmare
- 1 Christians: The world's most persecuted people
- 2 Israel-Gaza conflict: The secret report that helps Israelis to hide facts
- 3 Thatcher ‘was warned of Tory child sex party claims’
- 4 Lauren Goodger sex tape: Reality star calls for tougher laws on revenge porn after intimate video leaks online
- 5 The Simpsons Family Guy trailer: First look at crossover episode after Comic-Con debut
Israel-Gaza conflict: The secret report that helps Israelis to hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
Opponents of Israel's military operation in Gaza are the real enemies of Middle Eastern peace
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...
£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...
£30000 - £45000 per annum: Harrington Starr: A Global Financial Service Organi...
£30000 - £40000 per annum + Bonus+Benefits+Package: Harrington Starr: C# Web d...
Day In a Page
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar