Payment protection insurance: Point-of-sale ban will go ahead

There is to be a ban on the sale of payment protection insurance (PPI) at the same time as credit cards, loans and mortgages, Britain's competition watchdog said this week. Providers will instead have to wait seven days before they can contact customers to sell them the cover, the Competition Commission confirmed. The move upholds an earlier ruling it made on plans for a point-of-sale prohibition, which was subject to an appeal by Barclays. The Competition Commission is also introducing a package of measures to boost competition, including personal PPI quotes for consumers, annual statements on the cover, and better information to make it easier for people to shop around and switch provider. Barclays had argued the point-of-sale ban was not justified by the evidence collected by the commission, and failed to consider the inconvenience that could arise for consumers. But the commission said that, having reviewed the evidence, it had come to the clear view that customers would benefit "significantly" from its proposed reforms. It said the changes meant PPI providers would face real competition, where there is currently little, and as a result the cost of the cover would fall significantly. Payment protection insurance covers your debt repayments if you are unable to work due to an accident or illness, or if you lose your job or die. It is sold with a variety of financial products, though more than 90% of policies sold in the UK relate to unsecured personal loans, credit cards, mortgages and secured loans. The product has attracted heavy criticism in recent years after research found it had been mis-sold to many consumers who would never be able to claim on it, while others felt pressured into taking it out alongside a loan or credit card. The new measures do not apply to retail PPI, which typically covers repayments on goods bought through catalogues, as research suggested consumers buying this form of cover are unlikely to shop around due to the small sums involved. Providers will instead have to give consumers clearer information on the costs of retail PPI and make it easier for people to shop around.