There has been a proposal by the Competition Commission (CC) to curb Payment Protection Insurance (PPI) Insurance at the point of sale by the provider of a financial product. This is so that there is an increase in competition and and effectively a real choice in the PPI market. In its provisional findings report, the CC concluded that distributors of PPI—such as banks, mortgage providers and credit card providers—face little or no competition when selling PPI to their credit customers.
The details of the proposal are that the distributor of the product can not contact the consumer within 14 days of credit being sold, however consumers can contact the distributor for PPI 24 hours after the sale.
Credit providers will be required to provide a personal PPI quote, which will clearly state the cost of the PPI policy individually and when added to the credit product.
The Competition Commission is also proposing a ban on the sale of single-premium PPI policies, which it says act as a barrier to customers switching and the costs of which are difficult to compare with other PPI policies.
There will also be a requirement on all PPI providers to provide certain information and messages in PPI advertisements which will include the price of their PPI, expressed in a common format of monthly cost per £100 of monthly benefit, and that PPI is optional and available from other providers.
A requirement on all PPI providers to provide an annual statement for PPI customers,including information similar to that provided in the personal quote, to encourage customers to review their policy annually and make it easier for customers to decide whether to switch.
PPI is a very useful tool however there has been problems with this products as previously discussed in this blog. This is the very economic climate that consumers need this type of product the most and any information that gives the consumer choice and options by introducing transparency should be welcomed
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