Banning the sale of Payment Protection Insurance (PPI) at the point of sale of another credit product would "materially disadvantage" consumers, the secured loan industry body FISA argues.
FISA also describes the proposals, put forward by the Competition Commission (CC) as a possible remedy for the problems in the PPI market, as unnecessary and claims there are already sufficient safeguards for consumers in place.
The CC recommendations, announced a month ago, also included a temporary price cap on PPI to reduce prices across the board, another measure FISA describes as “extreme”.
John Parker, FISA chief executive, says the body is supportive of some of the CC proposals but claims separating the point at which advice could be given about the loan and the PPI is against TCF.
“There is much in the provisional findings from the Commission that FISA is supportive of, however, we believe that a number of the remedies outlined will have a negative impact on product choice, policy cover and borrower protection in the secured loan sector.
“The proposals regarding not selling PPI at the credit point of sale do not take into account the integrated decision that consumers are making at that time.
“An essential part of the decision to take out a secured loan is whether the consumer believes they will be able to continue repaying the loan should they succumb to unemployment, illness or accident.
“It would be difficult for the consumer to make this integrated decision if there was a time gap between the sale of the loan and any PPI discussions.”
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