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PPI ban is devastating news for borrowers says ABI

The Competition Commission's provisional decision to ban the sale of Payment Protection Insurance (PPI) when people take on additional financial responsibilities will leave millions of consumers unprotected. With a 69% increase in recently unemployed customers claiming on their PPI, news of today's ban will result in significant financial hardship for many individuals and their families.

A ban would mean that borrowers will be unable to take out the protection they need in a straightforward manner, in the very economic circumstances when they are likely to need it the most. Under these proposals, customers will not be allowed to arrange loan protection with their lender when they take on credit, even if they ask.

Responding to the news about the ban, Nick Starling, the ABI's Director of General Insurance and Health, said:

"This is devastating news for consumers. By effectively denying consumers PPI in the very economic climate that they need it most, the Competition Commission has got this completely wrong. Unemployment claims on PPI policies have grown by 69% in the last twelve months, showing just how valuable this cover is proving to be.

"The Competition Commission still has the opportunity to rethink its proposals before publishing its final report in January. It is essential that it does so. We understand that poor sales practices are never acceptable and we will continue to work with the Commission to resolve the outstanding issues in the PPI market. However, if the Commission continues down this path it will kill the PPI market altogether, leaving millions of consumers with no protection at all."

Last updated 01/07/2016