UK's Competition Watchdog Presses Ahead With PPI Proposals
July 08 2009 - 3:13AM
Dow Jones News
The U.K.'s Competition Commission pressed ahead with its
proposed clampdown on the payment protection insurance market
Wednesday, setting out its plans to introduce competition into the
market by October 2010, despite a legal challenge from Barclays PLC
(BCS).
"Although the CC's decision and proposed measures have since
been appealed to the Competition Appeal Tribunal by Barclays, the
CC has started consultation on the detailed implementation of the
changes to enable it to move quickly once the appeal is finalised,"
it said.
"Taking these steps now will help ensure there is no unnecessary
delay in resolving the significant competition issues that we found
in this market and in delivering a better outcome for consumers,"
said Peter Davis, the CC's deputy chairman.
The CC was scathing in its report into the market in January,
concluding that lenders face little or no competition when selling
PPI to their credit customers. Lenders make large profits selling
payment protection insurance to customers taking out credit, to
protect their payments in the event of sickness, unemployment or
death.
The Competition Commission is proposing a number of measures
including making lenders wait seven days after credit is taken out
before they can contact a customer to offer the insurance.
Barclays launched an appeal against the findings in April,
saying the point-of-sale ban was not justified by the evidence
provided to the CC.
Interested parties have until Aug. 7 to submit their comments on
the way the CC plans to implement its proposals.
-By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278;
michael.carolan@dowjones.com