Competition Commission to take over PPI investigation

Up until recently PPI, or Payment Protection Insurance, was something that many consumers in the UK felt obliged to take out whenever applying for finance such as credit cards, catalogue accounts, and loans. According to reports many lenders pushed the sale of PPI to consumers, even in cases when it was totally unsuitable for the consumers, and in some cases consumers were even led to believe that they had a better chance of getting the finance that they needed if they also took out payment protection insurance cover from the lender.

However, the controversy surrounding PPI sales has been building up for a number of months, and many consumers have now been made aware that not only did they not need to take out this insurance cover in order to get the finance that they needed but in some cases the cover was sold to them despite the fact that it was totally inappropriate and would never benefit them. Lenders have come under intense fire from the Office of Fair Trading and financial watchdogs over the mis-selling of PPI and a number of high profile lenders have already been fined over the matter.

As part of the investigation into PPI, the Office of Fair Trading has recently confirmed that it will be passing the investigation over to leading watchdog the Competition Commission. The Chief Executive of the OFT stated: 'Our examination of the evidence presented to date gives us reasonable grounds to suspect that there are features of this market which restrict competition to the detriment of consumers. Despite some evidence of a degree of consumer satisfaction with aspects of the product, the evidence as a whole suggests consumers get a poor deal. This referral will enable the Competition Commission to undertake a thorough investigation of the market and, if necessary, ensure that appropriate remedies are put in place.'