Competition Commission to reconsider PPI sales ban
by Gill Montia
The Competition Commission has been told to rethink plans to introduce a total ban on the sale of sale of payment protection insurance (PPI) alongside consumer credit agreements.
The insurance, which is intended to cover repayments on unsecured loans should the borrower lose their job or become too ill to work, is notorious for being mis-sold by banks and building societies.
Typically, lenders have given customers the impression that securing a loan or credit card is dependent upon takings out the provider’s PPI.
Following a Competition Commission enquiry, the sale of single premium PPI (which involved the premium for the whole of the loan period being folded into the debt and accruing interest) has been banned.
However, the Commission proposed introducing a ban on the sale of all PPI alongside a loan (and for seven days thereafter) in 2010, and Barclays took the matter to the Competition Appeal Tribunal.
The bank said was in agreement with the single premium ban but disputed some of the findings in the Commission’s enquiry with regard to the outright ban and challenged the scope of the market definition set by the Commission.
The lender also claimed the watchdog failed to take proposals made by the bank into account in coming to its decision.
The Appeal Tribunal has now asked the Competition Commission to look again at its findings and reconsider the proposed total ban.