Payment protection insurance sales curtailed

Providers will instead have to wait seven days before they can contact customers to sell them the insurance, the Competition Commission said yesterday.

The move upholds an earlier ruling it made on plans for a point-of-sale prohibition, which was subject to an appeal by Barclays.

The Commission is also 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.

It is also banning the sale of single premium PPI policies, in which the cost for the entire term of the policy is paid upfront and usually added to the debt being taken out.

Barclays had argued that the point-of-sale ban was not justified by the evidence collected by the commission and failed to consider the inconvenience that could arise for consumers.

But the Commission said that having reviewed the evidence it had come to the clear view that customers would benefit "significantly" from its proposed reforms.

It said the changes would mean PPI providers would face real competition, where there is currently little, and the cost of the cover could fall significantly.

PPI covers debt repayments for people unable to work after accidents or illness, if they lose their jobs or die.

It is sold to cover a variety of financial products, but more than 90 per cent of PPI sold in the UK relates to personal loans, credit cards and mortgages.