An investigation into payment protection insurance (PPI) is in danger of being hijacked at the last minute, according to insurance specialist Burgesses.
The firm says providers continue to offer “spurious” explanations of why they charge single premiums and refuse pro rata rebates.
As part of its inquiry into payment protection, the Competition Commission (CC) found consumers pay more than £1.4bn a year too much for PPI because finance providers in the £5.4bn market fail to compete properly.
Burgesses’ director, Sara-Ann Burgess, says it is “imperative” the CC does not give “disproportional weight” to the comments of providers that do not have consumers’ best interests at heart. The CC has asked for further information from the market before making its final recommendations.
“At the moment there are a lot of providers offering very spurious explanations of why they continue to charge single premiums, why they refuse to give pro rata rebates and why cutting the cost of PPI would increase the cost of available credit,” she says.
The CC has so far found providers were overstating the case when they said they had significant front-end costs to pay in personal loan PPI policies.
It has also discovered that, if consumers shop around, they can prevent providers from penalising them if they choose not to take out PPI.
“I hope the Commission refuses to let itself be hoodwinked as to the realities in this market and takes bold steps to make PPI work as it could and as it should,” Burgess says.
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Joined as head of strategy, multi asset, in June
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