Competition Commission proposals on payment protection insurance

The Competition Commission is proposing banning the sale of payment protection insurance (PPI) by a distributor to a customer within 14 days of credit being sold, though consumers woul be able to 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.

Happily, 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.

It is inviting feedback on the proposals until December 4 and will publish its final report in January 2009.

The Association of British Insurers has slammed the proposals, saying they will leave millions of consumers unprotected.

They would say that. No one is saying that PPI should be banned. Just that the banks shouldn't have an unfair advantage in selling their very profitable single premium PPI when a loan is taken out.