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CC crackdown on PPI could deter consumers, says MoneyExpert.com

One in five consumers will be less likely to take out payment protection insurance if the Competition Commission’s crackdown is enacted, according to research by MoneyExpert.com.

In November the Competition Commission proposed a ban on point of sale payment protection insurance as part of its attempt to increase competition in the PPI market.

The CC is proposing banning the sale of PPI by a distributor to a customer within 14 days of credit being sold, however consumers can contact the distributor for PPI 24 hours after the sale.

MoneyExpert.com research shows that of those who are less likely to take out PPI following a point of sale ban, 42 per cent would forget to do so later.

The website says that 67 per cent of adults believe they should be allowed to buy PPI at the same time as taking out a loan, credit card or mortgage.

MoneyExpert.com is warning that PPI should become more important in the year ahead as unemployment rises.

Director Sean Gardner says: “The Competition Commission deserves support in its attempts to improve the sale of payment protection insurance in the UK but doesn’t deserve support if its proposals lead to people missing out on insurance if they need it.

“The likelihood is that too many people who want insurance and who ought to at least have the opportunity to consider it will lose out as a result of the proposal to ban the sale of PPI along with credit. The financial services industry has to some extent dug itself into this hole but it is up to the Competition Commission to stop digging. PPI needs cleaning up to some extent but not shutting down.”

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