Commission's PPI update confirms reform intent

09/07/2009

Tighter rules governing the sale of Payment Protection Insurance (PPI) are coming closer, the Competition Commission (CC) has said.

The body originally announced a crackdown on the sector in January, including a banning of the cover alongside a loan or a card either during or in the week after the credit was taken out and an outright banning of single-premium PPI.

However, these decisions were subsequently appealed by Barclays, a provider of the cover.

The CC has now updated on the reforms, saying that it will move towards "detailed implementation" of the changes following the appeal hearing in early September.

Peter Davis, deputy chairman of the organisation, explained: "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 [appeal tribunal's] judgment.

"If [it] supports our findings, taking these steps now will help ensure there is no unnecessary delay in resolving the significant competition issues that we found in this market and in delivering a better outcome for consumers."

PPI is a type of credit insurance which covers the policyholder's repayments if they suffer a sudden loss of income, such as through being made redundant.

It has proved controversial over recent months, with consumer groups saying that it is being mis-sold by providers, offers poor value for money and is often wrongly purchased as a "default" option alongside a loan.

Tags; Debt Management and Banking, Credit Card Lifestyle, Recent Graduate Debt,

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