The Competition Commission (CC) is consulting on changes to the way retail payment protection insurance (retail PPI) is sold.


Financial services companies are preparing to roll out a replacement for the now discredited payment protection insurance which it is claimed will provide similar benefits to PPI, but will not cost the borrower a penny.

The new product is designed to cover loan repayments if a borrower is unable to work because of an accident, sickness or unemployment.

A credit union for airline employees is the first UK financial services company to offer the product, known as a “payment waiver”, with five more unnamed firms – two mortgage lenders and three personal loan companies – due to launch it in the next few months.

PPI Compensation Claims

The CC has outlined changes in a document today that will see clearer information provided to customers on the cost of retail PPI cover and their rights; ’unbundling’ PPI from merchandise cover and a requirement for providers to supply information to the new Consumer Financial Education Body (CFEB) for its price comparison tables.

Retail PPI is a small part of the overall PPI market relating to protection taken out on repayments for shopping through home catalogues, typically accounting for about 2.5% of PPI gross written premium paid by customers.

In May 2010, the CC provisionally decided that consumers would benefit from the introduction of a point-of-sale prohibition for all other forms of PPI, but provisionally decided to consider excluding retail PPI from this requirement. Although, like other forms of PPI, distributors of retail PPI face little or no competition when selling the product, the CC has not been convinced that in this case the advantages for retail PPI customers of introducing the prohibition would outweigh the costs-not least because research suggests that many customers are unlikely to search for alternatives given the relatively small sums typically involved.

The CC will publish its final decision on whether to implement the point-of-sale prohibition for other forms of PPI in the early autumn.

The final CC report into PPI was published in January 2009 and was the subject of a legal challenge to the Competition Appeal Tribunal (CAT) by Barclays, supported by Lloyds Banking Group and Shop Direct Group Financial Services Ltd. Whilst upholding the CC’s conclusions as to the competition problems in this market, the CAT ruled that the CC must in particular consider further the role and importance of a potential drawback to the point-of-sale prohibition, namely that it might inconvenience customers.

Since then, the CC has carried out a detailed analysis of the likely effects of such a prohibition including undertaking customer surveys, and an assessment of parties’ internal documents and of various experiments looking at the possible impact of splitting the sales processes of credit and PPI.

The CC will now invite comments on its proposals for retail PPI before publishing its final verdict along with that for the rest of the market in September. Comments on the draft decision are now invited by 3 September 2010.

Payment Protection Insurance: News & Information

FCA investigates Two Banks for mis handling PPI Claims

The FCA has confirmed that they are investigating two Banks for mis-handling PPI Claims. This comes after a report last week that the Financial Ombudsman (FOS) has seen an increase of PPI complaints being filed with them.

PPI complaints that are rejected by Banks are typically sent to the FOS for review. Our review of this last week pointed out that the FOS found that 8 out of 10 PPI complaints were upheld by the FOS. This has lead to the FCA stepping in to investigate the two main Banks that are rejecting valid PPI claims from customers.

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Banks rejecting legitimate PPI Complaints

The recent increase in PPI complaints being recieved by the FOS is a direct results of Banks rejecting increasing numbers of legitimate PPI complaints being sent to them. The FOS has upheld 8 out of 10 PPI complaints forwarded to them.

This 80% of upheld complaints by the FOS highlights how the Banks are increasingly rejecting valid PPI complaints being made by customers.

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Barclays PPI Complaints: 1,500 Per Day and Rising

Years after the controversial financial instruments have ceased being issued, PPI complaints are still flooding into the Financial Ombudsman Service each and every day, and current and former Barclays customers are leading the charge. In fact, the latest report states that the large financial institution receives more than 1,500 complaints every single day.

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PPI Claims – Leicester, UK

Maple Leaf Financial have a specialist team of solicitors dedicated to dealing with the mis-selling of payment protection Insurance (PPI) products by the banks in Leicester. We are happy to review these PPI products and to claim compensation for our clients where appropriate.

We will work with you to ensure that you get the correct PPI settlement or refund and any and all fair compensation that may be due to you as a result of PPI mis-selling. We will deal directly with your PPI provider, be it a bank or insurance company and neither we nor our specialist claims team will be fobbed off by them at any stage. If their offer is too low or derogatory and they won’t take us seriously we will challenge them on your behalf.

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Tim Capper reports on Financial Mis-Selling for Maple Leaf Financial. Our aim is to ensure you get honest advice and proper guidance to ensure a suitable recommendation can be made to pursue a financial claim


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Tim Capper

Bringing you financial news and information in plain english for Maple Leaf Financial. My aim is to help readers understand these often complex financial instruments.