The UK Competition Commission issued this month, its final decision on remedies following its investigation of Payment Protection Insurance (“PPI”) in the UK. PPI is insurance that may be purchased where a customer’s monthly debts (e.g. mortgage, credit card or personal loan payments) are in part covered should that customer fall ill, have an accident or become unemployed. As part of its decision the CC concluded that “businesses that offer PPI alongside credit face little or no competition when selling PPI to their credit customers”. In order to address this main concern, the CC is developing a detailed package of remedial measures to include: a ban on the sale of PPI during the sale of the underlying credit product and for seven days afterwards, a prohibition on single-premium policies, personal PPI quotes, annual statements and measures to ensure additional information is available to consumers to facilitate their the comparison and search for products. The CC is at present developing a regulatory Order to apply to providers reflecting these measures. The final report can be found on the Competition Commission’s website.
DotEcon has been advising a leading international bank responding to the CC’s inquiry. DotEcon has advised in particular on the assessments undertaken by the CC and the likely impact of the remedies.