ABI sales restrictions could hurt consumers

Sales jobs restrictions on Payment Protection Insurance (PPI) could exacerbate the "big gap" in protection in the UK, according to the Association of British Insurers (ABI).

The sales methods for PPI were recently branded uncompetitive in a Competition Commission (CC) report, which claimed that the current system was overcharging consumers.

But according to Kelly Ostler-Coyle, spokesperson for the ABI, CC proposals to restrict PPI could do more harm than good for consumers.

She remarked that restrictions on the sale of PPI alongside loan and credit products could leave many without cover.

"We already know that there is a big protection gap in the UK at the moment with other protection products and if this wasn't sold at the same time as the loan, it could mean that many people could be left without valuable protection," Ms Ostler-Coyle said.

PPI offers consumers a safety net in case they lose their job or fall ill and cannot meet their loan repayments.

Government statistics show that 100,000 more people were made redundant between April 2006 and March 2007.


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Filed: 12-06-2008