Not enough competition in PPI sales

According to recent reports industry officials are claiming that there is not enough competition when it comes to the sale of Payment Protection Insurance, or PPI. The criticism has come from officials from the Competition Commission, and comes after a flood of complaints from consumers.

The Competition Commission found that there was very little competition amongst providers when it came to PPI, and in general this form of insurance cover, sold alongside financial agreements, was turning out to be very profitable for these firms. Officials said that this makes it difficult for consumers to be able to shop around for better prices and products.

It is thought that banks and credit card companies are making billions out of consumers in relation to PPI sales, and the insurance has been at the centre of controversy for some time because it has been so widely mis-sold. It is looking at banning the sale of PPI alongside financial products to try and cut back on the problems.

A mystery shopper exercise into PPI sales was carried out by the Financial Services Authority recently, and the results showed that in a regular basis the customers was not being told the full details of the policy and how it worked. In many cases the customer was not even told that PPI would be added to the loan, and that the consumer would then end up paying interest on it.