PPI Plans Criticised by Banks
2008-11-14 15:21:38The Competition Commission plans to ban the sale of payment protection insurance to consumers has been criticsed by banks and insurance providers alike.
The Competition Commission's recommendations were to ban single premium policies, as well as preventing providers from offering PPI within 14 days of selling the loan. Their aim is to prevent consumers from feeling pressured into buying the PPI policies when they don't necessarily need them - the fortnight giving them time to evaluate their needs.
However, banks and the Association of British Insurers alike have criticised the recommendations, noting that it would be irresponsible to provide a loan to a borrower without offering the insurance to cover the payments in the event of unemployment. They also noted that this is a valid concern, as claims due to unemployment have risen 69% over the last year.
