Barclays revises PPI ahead of Competition Commission report

by Gill Montia

Story link: Barclays revises PPI ahead of Competition Commission report

Barclays has dropped the payment protection insurance (PPI) that had been tied to its Firstplus mortgage range.

The bank says it is in the process of revising its entire PPI range, so that it can offer customers a pick-and-mix choice of life, accident and sickness and unemployment cover.

The move comes ahead of a report from the Competition Commission that is due to be published next month.

The Commission has been examining the controversy surrounding PPI sold alongside mortgages, credit card agreements and personal loans.

Consumer groups such as Which? have accused lenders of mis-selling the insurance to the extent that two million people have bought inappropriate cover for their needs.

The UK PPI market is estimated to be worth £5.5 billion a year, with banks, retailers, and finance companies all taking a share.

Earlier this year, the Competition Commission reported that the large profits made by banks from selling PPI alongside personal loans has been propping up unprofitable lending.

The Commission concluded that profit on personal loans business had declined to the point where, in 2006, it appears to have been loss making before taking into account income from PPI.