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Competition Appeal Tribunal overturns CC’s point of sale PPI ban

The Competition Appeal Tribunal has overturned the Competition Commission’s proposal to ban point of sale payment protection insurance.

A judgment issued by the CAT today following Barclays appeal to the Tribunal over the CC’s PPI remedy package, said “the imposition of the POSP must be quashed and remitted for reconsideration”.

In its judgment, the CAT said the CC failed to take into account the loss of convenience which would flow from the imposition of a point of sale ban. It also said the methodology used by the Commission in quantifying the benefits expected from its remedies package was defective.

The judgment says: “The combined effect of those failings, coupled with the self-sufficient failure to take convenience into account in its conduct of the proportionality analysis contribute to our decision that the imposition of the POSP must be quashed and remitted for reconsideration.

“We quash the Commission’s decision to impose the POSP as part of its remedies package, and remit that question to the Commission for reconsideration in accordance with the principles set out in this judgment. We have not, of course, concluded that the Commission could not by that process lawfully decide to include the POSP as the result of that reconsideration.”

The CC says: “The judgment has not questioned our findings on the lack of competition in this market. The CC has proposed a package of remedies and the judgment affects one element of that package. We will now study the judgment closely before deciding our next steps.”

City law firm CMS Cameron McKenna partner Paul Edmondson says: “This is a wise decision. The Commission did not take account of the difficulties that the ban would cause for consumers and the undesirable increase in uninsured borrowers which would result.

“The ban may be back of course – but the Commission should consider whether there are better ways to protect consumers.”

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Comments

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  1. It seems that if you have enough financial muscle and influence, you can get just about any inconvenient proposal from the regulator overturned.

    If the IFA sector had similar resources, we could probably get most of the RDR flushed away where it belongs.

    Still, for now, we have to make do with lobbying.

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