The Competition Commission’s latest report recommending measures to prevent consumers being ripped off by lenders selling Payment Protection Insurance is lightweight and will not protect against exploitation, says Simon Burgess from independent PPI provider, British Insurance, “There is too much hesitation. Why recommend a possible ban on single premium policies and the sale of PPI at the credit application and why opt for a temporary price reduction? And what are these proposals to enable independents to compete more effectively? The Commission should flex its muscles much more than it has done to impose a permanent price reduction or take PPI away from the lenders.
“A price reduction might ensure PPI can no longer prop up losses in lenders other business areas, but then they will all try and sell more. Even if they do produce literature with a caveat that says PPI can be sourced elsewhere, they will use underhand tactics to keep it in-house. Lenders have proved they cannot be trusted so I believe the only option is to remove PPI from their portfolio and then it will not only ensure consumers have access to products that are competitive, provide value for money and are properly sold. Decisions must be taken now. This whole process is too slow, too much talk and too little action.”
Income protection insurance: News update: June 2008