PPI sale banned

20/11/2008

Proposals to ban the sale of payment protection insurance (PPI) has been described as "bad news for consumers" by the British Banking Association (BBA).

The Competition Commission (CC) yesterday published a consultation paper proposing that the sale of PPI within 14 days after the sale of a loan should be prohibited.

It is hoped that the new rules will increase consumer awareness of competing PPI products, which are often sold at the same time a loan or mortgage is agreed.

However, the BBA has claimed that the CC has gone "beyond its remit" and has branded the decision "irresponsible".

The BBA said: "It is totally without conscience to encourage people to borrow without back up.

"The Competition Commission is simply wrong to suggest people should be prevented from taking advantage of products designed specifically to cushion the effects of accident, sickness and unemployment at the very time they are considering taking out a loan."

Tags; Debt Management and Banking,

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