Competition Commission outlines proposals for PPI

by Gill Montia

Story link: Competition Commission outlines proposals for PPI

The Competition Commission (CC) has set out proposals on the implementation of new measures aimed at increasing competition in the Payment Protection Insurance (PPI) market.

PPI, which is intended to cover repayments on unsecured loans if the borrower loses their job or becomes too ill to work, has been the subject of controversy for years with consumer groups claiming that the market is uncompetitive and that cover is frequently expensive and mis-sold.

The Commission now wants consumers to receive personal PPI quotes and annual reviews which should make it easier to compare products and switch policies at a later stage.

The package also includes a prohibition on the sale of PPI during the sale of the credit product and for seven days thereafter and a prohibition on single-premium policies.

In April, Barclays contested a ban on the sale of PPI alongside a consumer credit agreement and is awaiting the outcome of an appeal to the Competition Appeal Tribunal (CAT).

The CC has promised to defend its case vigorously and its deputy chairman, Peter Davis, says: “By continuing with the necessary preparations … we can hit the ground running once the appeal is finalised and we have considered the CAT’s judgment.”

In other recent financial news, the Government revealed in yesterday’s White Paper on regulation of the financial sector that it is considering using a “traffic light” labelling system, similar to that used by the food industry, to improve the transparency of financial products.