Ban On PPI Sales To Be Enforced
We reported on several occasions, some time ago, that the Competition Commission (CC) and the Office of Fair Trading (OFT) had conducted a report into the sale of Payment Protection Insurance (PPI) policies at the same time as selling a credit product, such as a personal loan, credit card or home owner loan.
The investigation was conducted after an extremely high number of complaints from customers who had all been mis sold PPI policies at the same time they had taken out a new loan or other type of credit agreement.
PPI is designed to cover the monthly repayments on a loan or credit card if the borrower is unable to make the payment through loss of income due to accident, sickness or loss of job.
However, the investigation found that such policies were being sold as a matter of course at the same time as a new loan, in many cases to borrowers who were not even eligible for the benefits being sold, for example, redundancy cover to self employed people.
In some cases, borrowers were told that they would not be accepted for the loan they required if they did not take out PPI cover and it was things like this which convinced the Competition Commission that there was little or no competition in the market and as a result has now confirmed that a provisional ban on PPI at the same time as a new loan or other credit agreement is to be enforced.
A number of banks and other loan companies have challenged the decision, stating that borrowers would end up without cover for their loan, or that the lack of the PPI sale could increase the cost of the loan.
However, an appeal tribunal upheld the original decision by the CC and it looks as though the ban on PPI sales at the same time as a new loan will be enforced.
