The Competition Commission has upheld the ban on the sale of payment protection insurance (PPI) following a challenge from the banks . Having initially recommended that bank sales of PPI should not be permitted alongside loans or credit cards, Barclays succeeded in overturning a ban at a hearing at the Competition Appeal Tribunal (CAT). In their ruling, the CAT decided that the Competition Commission had failed to pay attention to the impact of a ban on consumers.
Having undertaken extra work to improve its case since the CAT's ruling, the Competition Commission is now inviting comments on its provisional decision before making its official verdict in July. Though it acknowledges that consumers like the convenience of being able to purchase PPI at the point of sale of credit, the Competition Commission is instead committed to boosting competition, by enabling personal PPI quotes for consumers and more widely available information about PPI providers and the cost of PPI each year.
Banks are likely to oppose any verdict outlawing the sale of PPI alongside loans or other forms of credit. Banks continue to struggle to attract new deposits to savings accounts, and are reticent to chase market share of loans, meaning PPI offers a valuable form of income for these banks, while allowing them to attract customers with seemingly low interest rates .
Competition Commission Announces Provisional Ban on Banks Selling PPI
Financial Services > e-banking > Banking news
Competition Commission Announces Provisional Ban on Banks Selling PPI
Fri, 14 May 2010
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