The Office of Fair Trading (OFT) on 7 February referred the payment protection insurance (PPI) market to the Competition Commission (CC) for in-depth investigation. Store card PPI services to non-business customers are not included in the reference.
This follows a public consultation in October 2006 on whether to make a reference. The OFT has noted that, based on the responses to its consultation, its concerns about the PPI market remain valid and an investigation is warranted.
The CC’s investigation can take a maximum of two years and depending on the CC’s findings, changes could be proposed to the way in which PPI is sold or how the products are structured. The Financial Services Authority (FSA) has also been reviewing PPI. The OFT and FSA have explained that they agree that "FSA action targeted at selling practices alone cannot remedy the lack of competition the OFT has identified in the PPI sector".
This announcement will keep up the pressure on providers of PPI who should be prepared to receive market information requests from the CC.
The OFT’s press release is available here.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 07/02/2007.
