MI_14-15_PPI.qxd 27/2/09 11:08 Page 2
14 | PPI
You will buy
PPI now!
Joanne Smith, managing director at The
Consulting Consortium, looks at point-of-sale
PPI and consumer perception, looking at why it
is now under fire
I
t's a fine line between competition and Competition
confidence. It is little wonder that In its final report the CC concludes that busi-
reports abound regarding 'record lows' nesses offering PPI alongside credit face little or
in consumer confidence due to worries no competition when selling PPI to their
involving the current economic situa- credit customers. To address the lack of
tion and the job market. As these pres- competition, the CC will be introducing
sures increase it is increasingly evident a package of measures to introduce
that consumers need all the protection they can competition in the market includ-
get. ing; a ban on the sale of PPI dur-
This leads us to the recent Competition ing the sale of the credit product
Commission action over the issue of single pre- and for seven days afterwards, a
mium payment protection insurance (PPI). prohibition on single premium
The pressure on single premium PPI hit boiling policies, personal PPI quotes,
point in January amidst the announcement annual statements and meas-
from the Financial Services Authority (FSA) ures to make sure that
that Alliance & Leicester, Barclays, Lloyds improved information is
Banking Group, The Royal Bank of Scotland available to consumers to
and the Co-operative Bank would no longer make it easier for them to
sell the product. compare and search for prod-
This was no isolated incident as PPI has ucts and switch policies at a
never been far from the headlines as its reputa- later point.
tion has continued to come under fire in recent The vast majority of the
times. So it was with little surprise that in an UK's more than 12 million
announcement on 29 January 2009, the PPI policies are sold at the
Competition Commission (CC) banned all same time as a consumer takes
banks and intermediaries from selling point of out a loan, credit card or other
sale PPI and single premium policies from type of credit. The CC found
2010. that many consumers are unaware
March 2009 Mortgage Introducer
www.mortgageintroducer.com
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