Subscribe to The Money StopNews Feed

Browse > Home / Insurance / Competition Commission plans to look into PPI

Competition Commission plans to look into PPI

July 30, 2008 by admin  
Filed under Insurance

1 Comment

PPI, which stands for Payment Protection Insurance, is a type of cover that is often sold with loans, credit cards, and other forms of credit. The purpose of the cover is to make repayments on the debt for a certain period of time if the policyholder cannot work and earn money due to illness, accident, or redundancy. The cover is often costly, but can prove valuable to those that can use it, as it offers peace of mind. However, it has been found that the cover has often been sold to those that can never claim on it, such as retired people and those that are self employed.

The Financial Services Authority has been cracking down on firms found to be mis-selling PPI for some time, and now the Competition Commission also plans to join in the fight against policies that are sold inappropriately to people who cannot use them or do not want them. Officials from the Competition Commission have added that lack of competition in the PPI market means that consumers are also being ripped off for around £1.4 billion a year.

The watchdog wants firms that sell PPI to make sure that consumers are fully aware of what PPI is and what it cover, and that they are not pushed into taking out the cover, as many have been in the past. In addition the watchdog said that it is thinking of bringing in a price cap on policies to make sure that consumers do not pay too much, and may also ban the sale of the policies alongside loans, credit cards, and other financial products.

A Competition Commission official said: ‘We’ve found serious problems with the PPI market and consumers are paying for the lack of competition. The way PPI is sold as an ‘add-on’ to a loan or other credit product means distributors escape the pressure they should face from competing suppliers.’ He added: ‘Distributors don’t appear to compete much with each other on either price or quality of PPI, neither do they appear to do much direct advertising of PPI to win customers from each other.’

Recent additions:

Tags:

Related Entries

  • Competition Commission still investigating PPI
    • The controversy over payment protection insurance has been going on for some time now, and regulators have been investigating the problems surrounding the sale of PPI after it was found that many consumers were being
  • Store cards forced to admit they’re bad value
    • Millions of shoppers across the UK will soon be told by their store card provider that they could be getting a better deal elsewhere.An inquiry by the Competition Commission into the Annual Percentage Rate (APR)
  • NI bankers may get interest-free overdrafts
    • People who do their banking in Northern Ireland (NI) may soon benefit from interest-free overdrafts.That is after a report released by the Competition Commission which has been looking at ways of increasing competition and lowering
  • Home credit lenders must make it easier to compare deals
    • Home credit lenders have recently been targeted by the Competition Commission in the UK, and the industry has been told that it needs to make things easier for consumers in the UK when it comes
  • Ban on PPI by Competition Commission
    • For the past few years the insurance cover known as Payment Protection Insurance or PPI has been causing a great deal of controversy in the financial world. This type of cover is commonly sold alongside
  • PPI market faces scrutiny
    • The Office of Fair Trading (OFT) has decided to refer the UK payment protection insurance (PPI) market to the Competition Commission (CC).A public consultation was held following an original proposition by the OFT for the
  • Credit card market lacks competition
    • There is a lack of competition in the debit and credit card market, meaning consumers are getting a bad deal.That is according to a new report published by the European Commission (EC) and it backs
  • PPI ban could mean higher fees and charges
    • It was announced recently that regulators are planning to stop the sale of the controversial single premium Payment Protection Insurance policies from lenders in 2010, and in fact in a bid to stop the sale

Comments

One Response to “Competition Commission plans to look into PPI”

Trackbacks

Check out what others are saying about this post...
  1. Gas bills could rise by £400 a year says:
    July 30, 2008 at 8:56 pm

    [...] Competition Commission plans to look into PPI [...]



Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!