Curbs on sale of payment protection
14th May 2010
Customers signing up for mortgage and home insurance deals may not be able to buy payment protection insurance at the same time under new plans for a point-of-sale prohibition.
The rule demanding lenders wait seven days before contacting customers to sell them PPI will apply to mortgage, credit card and loan companies.
Barclays had appealed the ban by the Competition Commission, arguing getting relevant insurance policies such as income protection cover quickly in place can be more convenient for the customer and provide immediate protection..
The commission is also banning the sale of single premium PPI policies, in which the cost for the entire term of the policy is paid upfront and usually added to the debt being taken out.
It is also introducing a package of measures to boost competition in the market, 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.
The commission was ordered to reassess its plans for a point-of-sale ban after the Competition Appeal Tribunal said the watchdog had failed to take into account the impact the ban would have on consumers.
PPI covers repayments on credit products if the borrower is unable to make repayments due to accident, sickness, unemployment or death.
Copyright © Press Association 2010
