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Daily Insurance Industry News
Sunday 21st of January 2018
April 7, 2009

Barclays contests ban on PPI sales

by Gill Montia

Story link: Barclays contests ban on PPI sales

Like the best of horror stories, the long-running saga over the sale of Payment Protection Insurance (PPI) alongside consumer credit agreements has a sequel.

Following a Competition Commission enquiry, the sale of the notoriously expensive single premium PPI with a loan is to be banned from 29th May.

Lenders have also been told that from 2010 they must stop selling the insurance at the point of sale of a credit card agreement or loan and for seven days thereafter.

Consumers will still be able to buy the insurance from their lender but will have to initiate contact 24 hours after signing up for a credit agreement.

However, Barclays has announced that it is contesting the 2010 ban, saying it disputes some of the findings in the Commission’s report, including the scope of the market definition set by the Commission.

The lender also claims the watchdog failed to take proposals made by the bank into account in coming to its decision.

Barclays will make its case before the Competition Appeal Tribunal in the coming months and the Competition Commission has promised to defend its position vigorously.

Last month, the Financial Ombudsman Service (FOS) reported that was dealing with over 800 complaints about PPI each week.

According to the FOS, PPI complaints now form around one-third of the watchdog’s caseload, with around 90% of cases upheld.

More cases of PPI mis-selling are expected to come to light as the recession deepens and job losses escalate.

 

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