The Telegraph

LLoyds stops selling PPI due to Claims

The Telegraph

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.

LLoyds stops selling PPI due to Claims

The Telegraph
PPI: Banks to be banned from selling alongside loans, Competition Commission rules
The Competition Commission is to ban the sale of payment protection insurance (PPI) alongside credit agreements.
Banks and other loans providers will be banned from trying to sell the controversial insurance policies to borrowers within seven days of the loan being taken out.
The commission is introducing a package of measures to boost competition in the market, including personal PPI quotes for consumers, annual statements on the cover, and better information to make it easier for people to shop around and switch provider.
In its final report, it said the vast majority of the UK's more than 12m PPI policies were sold at the same time as people took out credit cards, loans or other credit agreements, with many consumers unaware that they could buy PPI from other providers.
It said this point-of-sale advantage made it difficult for other providers to reach credit customers, leading to consumers being charged high prices.
In a previous report it estimated that the lack of competition in the market was leading to consumers being overcharged for PPI, which covers debt repayments if the holder is unable to work due to an accident or illness or if they lose their job, by £1.4 billion a year.
Peter Davis, inquiry chairman and Commission deputy chairman, said: "These are significant measures carefully designed to address the serious competition problems that currently exist in this market.
"Consumers' interests are not best served when the only choice the vast majority have is whether or not to purchase their credit provider's PPI product. The resulting lack of competition means that the only offer consumers get is simply worse value than they are entitled to expect."

LLoyds stops selling PPI due to Claims

The Telegraph
PPI: Swinton fined £770,000 and to refund 350,000
Swinton, the insurance broker, has been handed a £770,000 fine by the Financial Services Authority (FSA) for mis-selling controversial payment protection insurance (PPI) policies.

Under an agreement with the FSA, Swinton will contact over 350,000 customers who paid for PPI and offer them a refund.
Swinton's PPI sales process was "flawed", the FSA found, because of an "assumptive" selling technique in which PPI was automatically included in insurance quotes without first establishing that the customer had any real demand or need for the PPI cover. "This resulted in unacceptable levels of non-compliant sales," the regulator said.
PPI policies have been criticised for including hidden exclusions that make it difficult to claim successfully. While Swinton sold over 500,000 policies, only 266 claims were paid out, the FSA said. "Swinton did not put in place any or any adequate system for establishing that the PPI was suitable for the customer before the recommendation was made," it added.
"Swinton's sales process provided customers with inadequate information about the significant features of the PPI at the point of sale and the firm's sales process included statements about the extent of the PPI cover which did not adequately explain the features and benefits whilst at the same time explaining the complex limitations and exclusions."
In addition, the FSA found that Swinton did not make it sufficiently clear that PPI was optional, as the cost was bundled within the initial insurance quote. Swinton also failed to disclose before the sale completed that the policy cost only £1.21, with the remainder of the charge of £15 or £20 being a fee taken by Swinton.