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Plan of action

So, the Competition Commission has decided to tackle the problem of payment protection insurance misselling head-on. It is easy to sell and easy to buy, which is why many people are talked into buying it. The trouble is, it is not very good compared with the alternatives.

However, the proposed solution to ban point-of-sale PPI seems a little draconian. It is always a bad sign when insurance sellers appear to be so inept at getting their own house in order that the powers that be have to step in. No wonder the public has a dim view of the industry.

It is very encouraging that the Competition Commission is taking the problem of PPI so seriously. Maybe it would be preferable if instead of depriving consumers of the right to buy a product, however poor it might be, it ensured that consumers have all the knowledge they need to make an informed decision for themselves. Making it compulsory for PPI sellers to highlight the alternative of income protection would ensure that consumers are at least aware of other options. However, this is nitpicking to a certain extent. The positive news is that someone at last seems prepared to do something about the PPI mess.

The trouble is that while PPI is so easy to sell and easy to buy, it will continue to be served up to ill-informed consumers. What is needed – and what Lifesearch has been working on in recent months with a major provider – is a product which combines the simplicity of PPI with the comprehensiveness and competitive pricing offered by other products, such as critical-illness cover and income protection. That should capture the public’s imagination as it will cut down on the complexity and array of choices while offering something that will cover them in a way that no single product can do.

Now, more than ever, the industry needs to be bold in pushing forward new products and shunning the quick-fix sales which have given the industry a bad name. The fallout from PPI misselling has created a wave of bad publicity and when you have sellers appearing to mislead the public by calling their PPI product “income protection”, it is no wonder that consumers turn their back on the mess and income protection sales struggle.

We hope our new product will lead a reinvigoration of the proper income protection market in a way that is more appealing to consumers and sellers, at the same time as the powers that be back the Competition Commission to work towards ensuring that PPI is no longer sold when it should not be.

It is up to you to ensure that the PPI pushers’ voice is not the only one heard in this debate. Email your request to include income protection information in PPI sales to ppi@cc.gsi.gov.uk, otherwise we could lose the chance to improve the way customers are treated and another nail will be hammered into the income protection coffin.

Matt Morris is policy adviser at Lifesearch

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