CC wants restrictions on catalogue PPI

The Competition Commission has recently stated that it wants to see restrictions placed on the sale of payment protection insurance alongside goods that are sold in catalogues. The insurance, known simply as PPI, is designed to cover repayments on the debt in the event that the policyholder is unable to work due to sickness, injury, or redundancy.

The main restriction proposed by the Competition Commission means that catalogues would not be able to sell PPI cover within fourteen days of granting credit to a customer. The Competition Commission has also been looking at plans at restricting PPI sales in the wider marketplace and not just with catalogue sales.

The Commission stated: “Retail PPI is highly profitable for distributors and there is little competition between providers on price and other factors, limited ability for customers to search for alternatives or switch products and a considerable point-of-sale advantage for the providers.”

A report from the Commission read: “As we found that distributors have high margins, and enjoy high profitability, when selling retail PPI, we concluded that consumers were paying prices higher than they would in a well-functioning market, in line with the provisional findings for other forms of PPI.”