A ruling by the UK’s Competition Commission (CC) to bring
sweeping reform to the country’s payment protection insurance (PPI)
market in 2010 has hit a snag. Barclays Bank and Lloyds Banking
Group are appealing against the ruling to the Competition Appeal
Tribunal.
In particular, the banks are opposed to the banning of the sale
of PPI by a credit provider within seven days of the sale of
credit.
Go deeper with GlobalData
The banks’ appeal has drawn mixed reactions from market
commentators, including one of the most outspoken proponents of PPI
reform, consumer activist organisation Which?
“PPI has been dissected and discredited through numerous
investigations and FSA [Financial Services Authority] fines and the
Financial Ombudsman continues to uphold the majority of complaints
in favour of the customer,” said Which? CEO Peter
Vicary-Smith.”
Taking a more balanced stance, Sean Gardner, a director of
financial product comparison specialist MoneyExpert.com, noted the
CC’s ruling had gone a long way to cleaning up a market that has
rightly been criticised.
However, Gardner added: “At a time when unemployment is soaring,
PPI is becoming genuinely valuable and data from across the
industry shows claims have doubled recently.
“The Competition Commission is risking throwing the baby out with
the bath water in its PPI clean-up by banning the sale of PPI
alongside credit cards, loans and mortgages.”
Notably, research by MoneyExpert.com reveals that 20 percent of
adults would be less likely to buy PPI if they could not take it
out at the point of sale.
