The CC’s proposed PPI remedies, which include banning point of sale PPI and single-premium policies, have been described as a “mixed bag” by PwC regulatory practice director David Morey.
Morey says: “Whilst some remedies are likely to be positive for consumers, there must be a real concern that the level of protection provided to customers will fall, potentially in a dramatic fashion.
“The CC’s remedy to de-link the sale of PPI from the credit will without doubt lead to a significantly lower amount of cover being sold. That does not seem to be a sensible thing to be doing in the current climate.”
Morey says with the protection gap already at £2.3tn, the proposal to ban credit point of sale could mean that consumers will be “less inclined” to reassess their protection needs outside of the credit sale process. The remedies also seem to be “tilting the playing field towards ‘stand alone’ distributors”, fears Morey.
He says: “If the Commission does proceed with this set of proposed remedies, lenders will need to make significant changes to existing models which is expected to lead to higher loan costs. Again, the timing of this is clearly not helpful.”