Over the course of the past few months, there have been several reports on the Competition Commission’s (CC) investigation into the sales practices of companies who offer Payment Protection Insurance (PPI) at the same time as arranging a personal loan, or other credit agreement, following a large number of complaints from customers and claims that borrowers are not given the option of choosing their own policy to protect their loan from the whole of the marketplace, thereby limiting choice for consumers.

Yesterday, the CC published the final version of its PPI report, which stated that there was not enough competition between PPI providers, as people tended to take out the plan offered by the company arranging the personal loan or credit card at the same time as the loan application.

The changes to be introduced following the reports findings are as follows: a ban on sale of PPI at the same time as a loan or credit agreement and a waiting period of 7 days before the customer can be approached for such a policy, a complete ban on single premium PPI, as this stops a customer being able to change providers at a later date, personal illustrations and annual statements are to be introduced in order to provide more information for customers to be able to compare products.

Although this move will certainly improve competition between PPI providers, it is feared that a large number of people who apply for a personal loan or credit card, will simply miss out on this cover, as once they have the loan in place people tend to lose interest in things such as protection policies, which cost them extra money.

As was reported in the financial press yesterday, with PPI claims for unemployment increasing by more than double since twelve months ago, this really isn’t the best time for borrowers to be missing out on this valuable cover, for whatever reason!