The call follows accusations from Simon Burgess, managing director of PPI brokers Burgesses, that the General Insurance Standards Council (GISC) is turning a blind eye to excessive commission payments because members hand over 0.1 per cent commission as an annual membership fee.
“There is clearly a serious consumer scam operating in the payment protection insurance market,” said Cable. “The big banks, and a small number of specialist brokers, are taking advantage of weak rules, which do not require disclosure of commissions, to charge outrageous premiums.”
However the GISC rejected accusations that commission payments were excessive and said there were very few complaints from consumers regarding PPI.
GISC spokeswoman Rachel Maidment, said: “If the OFT does investigate we will of course be more than happy to co-operate. We have been in touch with the Consumer’s Association and they too have had very few complaints regarding PPI.”
She went on to question why Burgess was so determined to criticise the industry he was part of.
Burgess remained adamant, saying: “Any organisation that takes more than 50 per cent of a PPI client’s premium is profiteering, its as simple as that.”
