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Barclays to appeal against point-of-sale PPI ban
LLoyds stops selling PPI due to Claims
PPI: Barclays to appeal against point-of-sale ban
Barclays is to appeal against a ban on lenders selling payment protection insurance at the same time that the underlying loan is sold.
Barclays is contesting the findings of a 23-month investigation by the Competition Commission on PPI. The commission said in January that lenders shouldn’t sell PPI at the same time as a loan. It also banned single-premium PPI, when the repayments on the credit and the insurance premiums are shown as one sum.
“The main area of concern is the point-of-sale ban which, it is felt, is not justified by the evidence that has been provided,” Barclays said in a statement. “Additionally, the scope of the market definition set by the Competition Commission is being challenged.”
Barclays isn’t challenging the whole of the commission’s report. It’s asking the tribunal to make the commission reconsider the ban and pay its costs.
PPI, which generates as much as £5.5 billion of annual revenue for British banks, is sold to cover payments on loans and mortgages in case of sickness or unemployment. The product has come under scrutiny from regulators including the Financial Services Authority, which decided in February to ban single-premium PPI.
The Competition Commission said: “We’ll defend our case vigorously and, given that we’ve identified what we think are long-standing problems with the PPI market, we’ll want to minimise any delay this causes to implementation of the remedies.”
Barclays has already stopped selling single-premium PPI after 20 FSA enforcement cases, one of which resulted in a £7 million fine on Banco Santander's Alliance & Leicester for aggressive sales.