PPI sale ban goes ahead

The Competition Commission (CC) has confirmed that it will ban point-of-sale payment protection insurance (PPI) selling, except for retail PPI.

After a legal challenge last year to the Competition Appeal Tribunal (CAT) by Barclays, supported by Lloyds Banking Group and Shop Direct Group Financial Services it had to consider if a ban might inconvenience customers.

Reviewed evidence

Peter Davis, Inquiry chairman and CC deputy chairman, said: “Having reviewed the evidence, we have come to a clear view that, overall, customers will benefit significantly from the market reforms we propose introducing for PPI products.

“In particular, 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.

“In essence, there are clear benefits of putting our remedy package in place. First, we found that some consumers would actually value an opportunity to reflect on their options away from the credit point of sale.

"Second, the package of remedies—including the point-of-sale prohibition—will introduce competition which is likely to bring substantial benefits to customers in terms of lower prices, better products and more choice.

“While the evidence does suggest that there is a potential downside to the prohibition, that some consumers will indeed suffer an inconvenience from not being able to purchase PPI at the credit point of sale, we are unanimous in our view that overall, consumers will be better off.”