OFT Refers PPI Market To Competition Commission

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".