Measures to improve payment protection insurance competition planned
The Competition Commission has revealed a plan to introduce measures to increase competition to businesses offering payment protection insurance (PPI).
Measures to improve payment protection insurance competition planned”
PPI sold to credit customers alongside credit – including on credit cards - creates little or no competition, the Competition Commission suggested.
To create more competition, the commission intends to ban the sale of PPI during the sale of credit products or for seven days after the sale.
Further still, it is also looking to ban single-premium policies.
PPI is intended to cover repayments if a borrower cannot make repayments due to accident, illness or unemployment. It is offered on credit products including loans and mortgages.
Credit card issuer Barclays has appealed to the Competition Appeal Tribunal (CAT) over the Competition Commission's proposed measures. However the commission has started consultation on how the changes might be implemented once the appeal is finalised in September.
Peter Davis, inquiry chairman and Competition Commission chairman, said: "Whilst we are waiting for the outcome of the appeal, we are pressing ahead with the detailed work needed to put these measures in place. By continuing with the necessary preparations like this, we can hit the ground running once the appeal is finalised and we have considered the CAT's judgment."
Written by Charlotte Stevens ©
