PPI point-of-sale prohibition confirmed

PPI point-of-sale prohibition confirmed

PPI point-of-sale prohibition confirmed

The Competition Commission (CC) has confirmed it is to implement a point-of-sale prohibition on all forms of payment protection insurance (PPI), apart from retail PPI, as part of a reform package.

This form of protection is an insurance product that is intended to cover a debt that is currently outstanding.

Typically, the debt is in the form of a loan or an overdraft and the product is often sold by banks and other credit providers as an additional feature.

It is intended to cover the borrower against problems that may prevent them from servicing the loan, such sickness and unemployment.

However, there has been much controversy in recent times over allegations that firms had mis sold PPI to consumers.

Investigations have since been ongoing and amendments to the rules governing the product are being implemented.

In May, the CC announced a provisional decision under which a point-of-sale ban would be implemented and the body has revealed it is sticking to this policy.

It is one of a number of measures that the commission plans to put in place in order to prevent consumers being mis sold PPI.

According to the organisation, businesses that offer the product face little or no competition when selling to their credit customers.

Commenting on the changes being implemented by the CC, deputy chairman Peter Davis said: "These reforms will mean that PPI providers will, in future, face real competition where there is currently little. And, in consequence, the prices consumers currently pay for PPI will fall significantly."

He added: "The fundamental problems ... can only be tackled by addressing the root of the problem - the advantage that those selling PPI alongside credit products have over potential competitors."

Mr Davis went on to note his belief that the package being implemented by the CC will result in "substantial benefits" for consumers.

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