CC ban signals death of PPI warns AFB

Robert Sinclair, director of the Association of Finance Brokers has warned that the Competition Commission’s ban on the sale of payment protection insurance at point of sale for brokers will spell the death of PPI.

The CC’s remedies into the PPI market were published earlier in the year and had been widely interpreted as allowing credit brokers to sell PPI at the point of sale and providers that would have to wait 14 days before contacting the customer.

However the CC published an update on its proposals on Friday which stated the distributor or broker cannot sell PPI at any point in the original meeting and cannot include PPI in the primary credit agreement, they will have to wait 14 days before a sale unless contacted by the client.

Sinclair says: “In simple terms the abolition of single premium PPI along with the ban on brokers being able to sell PPI at point of sale will mean the death of the PPI product.”

He says when consumers start to shop around themselves within they are likely to turn to price comparison sites, which he is calling on to be regulated.

The CC says the broker can provide information and a quote on PPI but not sell the product. However after 24 hours the customer can buy a PPI policy from any other company as long as it is not the one they got the original advice from.