Barclays wins case on PPI reforms

The Competition Commission will have to reconsider its proposal to ban the sale of a controversial insurance product alongside credit deals after it lost a legal challenge to its plans brought by Barclays Bank.

The regulator announced earlier this year that from October 2010, lenders would no longer be able to sell payment protection insurance (PPI) alongside credit card, loan and mortgage deals. Instead, the Commission said lenders would have to wait for a period before trying to sell borrowers the product.

However, Barclays told a hearing at the Competition Appeal Tribunal that the ban was disproportionate, and yesterday was told the Commission would be forced to think again.

PPI policies have been the target of a campaign for tighter regulation by consumer groups, which argue that the cover is expensive and often riddled with loopholes.