New PPI rules revealed
14 November 2008
The Competition Commission has said that payment protection insurance (PPI) should not be sold to people until they have had a loan for more than 14 days, it has been reported.
It said that the majority of PPI agreements are taken out at the same time a loan or other type of credit is taken out., It says this means consumers may not be aware they can buy PPI from other places.
According to the Commission, this lack of knowledge means that PPI providers are not feeling pressures from the market to offer the best deals. This allows them to charge high prices for their cover.
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Under the new rules, a provider cannot offer PPI insurance to a customer who has purchased credit from them for at least 14 days.
The Commission says this will give people more opportunity to compare prices and get the best deal they can.
However, the news has been met with disapproval from many in the finance world.
A statement from the British Bankers' Association said that it is "totally without conscience to encourage people to borrow without back-up".
