The Competition Commission final report into the Payment Protection Insurance, (PPI) market has been published and confirms that the commission will order firms to wait 7 days before they are allowed to contact customers to sell the cover, not 14 as was originally intended.
Consumers that want PPI can contact the provider to purchase it after 24 hours, but the sale of single premium PPI is to be banned altogether.
Distributors and brokers will be required to provide a ‘personal PPI quote’, which will clearly state the cost of the PPI policy individually and when added to the credit product.
If this is not given at the point of sale, the credit provider must provide it if they subsequently contact the customer to offer PPI.
The seven-day prohibition period starts from the later of the conclusion of the credit sale or the date on which the personal PPI quote is provided to the customer.
The delay is intended to allow consumers to compare different products, but some fear it will lead to customers going unprotected.
Peter Davis, inquiry chairman and CC deputy chairman, says: “These are significant measures carefully designed to address the serious competition problems that currently exist in this market.
“The ‘point-of-sale’ advantage has meant that leading providers have faced little competition for PPI and, as a result, have charged persistently high prices.
“Consumers’ interests are not best served when the only choice the vast majority have is whether or not to purchase their credit provider’s PPI product.
“The resulting lack of competition means that the only offer consumers get is simply worse value than they are entitled to expect. Allowing the current short-comings to continue unchecked would be damaging not just to consumers but also ultimately to the PPI industry itself.”