Its investigation has failed to clearly identify the main issue behind the lack of competition within the PPI market.
Paymentcare.co.uk has asserted that the link between PPI and point of sale for credit agreements needs to be broken if consumers are to be truly treated fairly, but the closest the Competition Commission gets to this is stating that sometimes the cost of PPI is higher than the interest paid on the loan.
Shane Craig, managing director of Paymentcare.co.uk, said: “This eagerly-anticipated report is singularly disappointing and will do nothing to prevent consumers from continuing to be sold overly-expensive PPI that may not be appropriate to their circumstances.
“There is no question that lenders selling their own PPI alongside a credit agreement, such as a personal loan, are not operating within a competitive environment. Point of sale decisions remove the opportunity for customers to consider other forms of protection. How can consumers make an informed choice if there is nothing to choose between?
“Take-up of lenders’ own PPI would unquestionably fall if it was separated from the primary credit agreement. Lenders have already got their foot in the door when the customer is signing up for a loan or mortgage and it’s not in their interest to let them go away and think about it.”
"The fact that the same levels of protection can be obtained from stand-alone providers at a much lower cost must surely be conclusive evidence that consumers who are not made aware of this alternative are not being treated fairly. When balancing the benefits of insurance against the cost, a decision can only be made if consumers know the full range of options open to them.
“The Competition Commission’s final report is not due to be completed for another year. If that comes to the same conclusions as this announcement, millions of borrowers will continue to either pay over the odds for cover they could buy much cheaper elsewhere or risk being unprotected altogether.”
