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Barclays wins PPI appeal

Controversial insurance granted reprieve by courts

A consumer signing a form

The campaign to ban the sale of payment protection insurance alongside credit cards and loans has been dealt a blow, after a tribunal rules that the Competition Commission must reassess its position on PPI.  

Barclays, with the support of taxpayer-owned Lloyds Banking Group, has recorded a partial victory against the Competition Commission’s decision to ban providers from selling payment protection insurance (PPI) to customers buying a credit card or loan. The decision is a blow to Which?’s campaign against the sale of PPI in tandem with credit products. But, as the Competition Appeal Tribunal has granted the Competition Committee leave to review its complaint, the PPI campaign will continue. 

Which? campaign against PPI

Which? has long campaigned for PPI to only be sold separately to credit products, to avoid the problem of mis-selling. An estimated 2 million people may have been sold policies that they either don’t need or cannot claim on. Thousands of borrowers have reported that their PPI provider refused to pay up following the loss of income as a result of accident, sickness or unemployment.

Conversely, PPI has proved a winner for providers, who have realised huge profits. Consumers who feel they may have been mis-sold PPI can get more information on how to lodge a claim via the dedicated PPI campaigns page.  

Which? personal finance manager Doug Taylor said: ‘It’s disappointing that the point of sale ban can’t be enforced for now but the Tribunal has left the door open for one to be imposed in the future. The Competition Commission must now come back with a stronger case for a ban. This is just a reprieve for point of sale, not a let off.

‘Consumers should be able to choose between competing products in order to make informed decisions about how best to protect their finances. Instead, they’re faced with a yes/no decision as to whether they want to protect their finances or not.’

The Competition Commission’s response

The Competition Commission has not decided what it will do next, but has released a statement on the ruling: ‘The judgment has not questioned our findings on the lack of competition in this market. The CC has proposed a package of remedies and the judgment affects one element of that package.

‘The appeal was upheld on one ground which relates to our assessment of the remedy prohibiting the sale of PPI at the point of sale of credit. The CC has been asked to reconsider the loss of convenience for consumers.’

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