Last week, the CC proposed to ban the sale of PPI by a distributor to a customer within 14 days of credit being sold and on the sale of single-premium policies. Trade associations, such as the ABI and the Association of Finance Brokers, fear the move will leave millions of consumers unprotected.
AFB director Robert Sinclair says: “We are concerned that a 14-day period prohibiting the sale of PPI may leave some consumers underprotected. A total ban on single-premium sales fails to appreciate some of the product features offered by this product to more vulnerable consumers. We would have preferred to see other remedies relating to product design given further consideration rather than the imposition of a total ban.”
ABI director of general insurance and health Nick Starling says the ban is “devastating for consumers”.
He says: “By effectively denying consumers PPI in the very economic climate that they need it most, the CC has got this completely wrong.
If the Commission continues down this path, it will kill the PPI market altogether, leaving millions of consumers with no protection at all.”
Royal Liver IFA manager Aidan Dewhurst says that while banning point of sale will stop misselling, he asks: “At what cost?
“It seems very drastic to try and stop misselling by stopping selling itself. Surely there is a better alternative. A better approach would be to look closer at the sales themselves and try and improve working practices.” The Consulting Consortium managing director Joanne Smith says that the proposals will go some way into solving problems with misselling but with unemployment rising, now is the time “people are more likely to actually require PPI”.