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Barclays PPI appeal
in Reclaim PPI & other insurance
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Former_MSE_Guy Former MSE
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Thanks for posting this Guy, I did in-fact post an article about these in the above reclaiming discussion thread yesterday, I shall find it and post it here if that is okay.;)
Barclays fights to have PPI ban overturned
Alan O'Sullivan, This is Money
Barclays is contesting the recent ban on the sale of controversial payment protection insurance along with loan agreements.
Barclays knows best: the bank believes PPI should be sold with loans.
New rules should finally end the loan insurance rip-off. And not before time.
- PPI victory
The ban, due to come into force next year, was announced by the Competition Commission in January, along with a host of changes to the way PPI is sold in order to improve competition in the market.
If Barclays is successful and the ban is overturned, all lenders will be able to return to selling the expensive PPI policies along with credit cards, mortgages and loans - overturning years of campaigning by consumer groups, including This is Money.
The Competition Commission ruled that lenders must stop selling PPI alongside loans after years of hard-selling techniques that raked in billions on cover that often cannot be claimed on.
The sale of PPI has been criticised as it is often expensive relative to the loan it is covering: PPI covers loan repayments if the borrower is unable to pay them in such events as unemployment or illness.
However, consumer groups have long argued there is a lack of understanding of PPI among borrowers, who sometimes feel pressurised into taking out the cover when applying for a loan.
Barclays argues PPI should be allowed at point of sale and believes some of the Commission's findings in its PPI report are flawed. It says the Commission failed to take some proposals made by Barclays into consideration before making its final judgement.
However, it is not contesting the ban on the extremely expense form of 'single premium PPI', sale of which were banned entirely at the same time. It also does not contest the Commission's ruling that more information should be provided on the product.
The Commission said it did not expect Barclay's appeal to hold up implementation of the ban next year, but it could not guarantee this. It expects to have a date for a court hearing by the end of this month, 'hopefully' followed by a resolution within several months.
A Commission spokesman said: 'Our main priority is to fight this case. Hopefully, we can minimise any delays this would cause to the measures and it won't stop us from laying the groundwork.'
Barclays said that it would continue to prepare for the ban along with other PPI providers, until the results of its Competition Appeal Tribunal become known. A spokeswoman said: 'The appeal does not challenge the whole report but is targeted specifically against two points. 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.
'Additionally, the scope of the market definition set by the Competition Commission is being challenged.
'The decision to appeal these points has not been taken lightly. However Barclays will continue working on the implementation of all of the remedies contained in the Competition Commission's report as they are applicable whilst the appeal is ongoing.'