This snapshot, taken on 04/03/2010, shows web content selected for preservation by The National Archives. External links, forms and search boxes may not work in archived websites.
We're creating a single website for everything to do with BIS but, while we do that, you'll find information in three places. > Find what you're looking for
The Office of Fair Trading (OFT) referred the market for Payment Protection Insurance to the Competition Commission (CC) on 7 February 2007 under section 131 of the Enterprise Act 2002.
The CC published its final report on 29 January 2009.
The CC concluded that each distributor and intermediary (such as a bank, mortgage provider or credit card provider) faces little competition for the sale of Payment Protection Insurance (PPI) when it is sold in combination with the credit it insures. CC found that there were features of the relevant markets for PPI which led to an adverse effect on competition (AEC) in these markets and in turn resulted in consumers facing higher prices and less choice than they would if there was effective competition between PPI providers. As a result of this lack of competition, CC found that it is highly profitable for distributors to sell PPI, though it found that some of the resultant profit is used to subsidize credit prices.
On retail PPI – which is a small part of the overall PPI market relating to protection taken out on repayments for shopping through home catalogues – the CC found that it is highly profitable for distributors to sell and there is little competition between providers on price and other factors, limited ability for customers to search for alternatives or switch products and a considerable point-of-sale advantage for the providers.
The CC identified a package of remedies to address the adverse effects identified. One remedy – relating to the use of information for price comparison tables – falls to the Financial Services Authority (FSA) to implement. The CC can implement the other remedies using its order-making powers. There are no recommendations addressed to Government.
Under the Competition Appeals Tribunal (CAT) rules, bodies who are the subject of a CC report are able to appeal within 2 months of publication of that report. Barclays submitted an appeal on 30 March 2009.
