The AFB broadly welcomes the proposed reforms but warns of the danger of further removal of consumer protection with moves to end single premium PPI.
Robert Sinclair, director of the AFB, says: “We broadly support the package of measures for reform of the PPI market. However, we urge the CC to consider carefully the impact on consumer protection.
“At a time when consumer confidence is at an all time low, an increased vulnerability of consumers is evident in this economic climate, we urged the CC not to reduce further consumers’ access to protection products, at a time when they are most needed. We therefore caution the approach of the CC in their recommendation to remove access to single premium PPI.
“We were pleased to see confirmation that the prohibition of the active sale of PPI by a customer within 14 days of the sale of credit had not been applied to intermediaries and only distributors. We would urge the CC to follow through with this recommendation.”
In its response the AFB also points out that revised ICOBS and emerging rules from the Office of Fair Trading has increased understanding and application of regulation by firms.
And that the CC should be wary of introducing yet further regulation, which could force good firms out of the market – to the detriment of consumers.
It also wants to see a distinct separation between product and service advertising and the regulation to be applied to price comparison websites as well as cautioning against the mandatory production of annual statements.
The Competition Commission launched its investigation into the PPI market in February 2007. It published its proposed remedies designed to increase competition in the retail PPI market on November 13 with responses due by December 4 2008.