Which? 'hopeful' PPI ban will be upheld

Consumer champion Which? says it is “hopeful” the appeals court will rebuff a challenge from Barclays and Lloyds over a decision to limit sales of payment protection insurance (PPI).

The campaigning organisation says it is confident recommendations made by the Competition Commission (CC) following a two-year review of PPI will be upheld.

Which? also says it is particularly concerned by Lloyds' involvement in the case, arguing it, as a taxpayer-funded entity, "should be looking to optimise customer service".

In January, the CC recommended that from next year lenders be forced to stop selling PPI at the ‘point-of-sale' of another product, such as a loan, or for seven days afterwards.

But Barclays bank, supported by Lloyds, lodged an appeal with the Competition Appeal's Tribunal (CAT) in March.

Barclays makes clear it does challenge the whole CC report, but instead its recommendations for point-of-sale PPI. It says it also disagrees with the "scope" of the market definition set by the CC.

A four-day hearing finished last Thursday (10 Sept) but a result isn't expected for weeks.

"Although it is impossible to second-guess the outcome, we hope the Competition Commissions' findings are upheld," Which? campaign project manager Lucy Widenka says.

Widenka says one of Which?'s chief concerns is some consumers are not informed of significant exclusion clauses in PPI policies. She says, for example, many contracts stipulate claimants must be in full-time employment, so, when out-of-work or part-time worker policyholders make a claim, it is rejected.

The CC's recommendations followed years of complaints and criticism of PPI by consumer organisations and the Office of Fair Trading (OFT).

In May, the FSA stepped up the pressure on banks and other lenders who sell PPI as a profitable add-on, typically when granting personal loans, operating credit cards, or offering mortgages.

It instructed them immediately to stop selling one version, called single premium PPI, rather than wait for the CC's proposed deadline of October 2010.