Barclays PPI appeal begins

07 September 2009 / by Rebecca Sargent

The appeal from Barclays against the ban on selling payment protection insurance (PPI) alongside credit agreements begins today.

The appeal, which is to be heard by the Competition Appeal Tribunal, will run until Thursday, and challenges a recent decision made by the Competition Commission to ban the sale of PPI alongside credit cards, loans and mortgages from October 2010.

The move to ban payment protection insurance at point of sale was part of a number of measures launched on the back of the Competition Commission report in a bid to increase competition in the market. However, Barclays has challenged this decision, arguing that the Competition Commission failed to justify its argument adequately.

Speaking to the Press Association, a Barclays spokesperson said that the bank is not appealing against the whole Competition Commission report, but is targeting two points.

"The main area of concern is the point of sale ban which, it is felt, is not justified by the evidence that has been provided.

"Additionally, the scope of the market definition as set by the Competition Commission is being challenged," the spokesperson added.

Saying: "The decision to appeal these points has not been taken lightly. However Barclays will continue working on the implementation of all of the remedies contained in the Competition Commission's report as they are applicable."

Barclays has the support of Lloyds Banking Group in its appeal, although consumer group Which? believes that the point of sale ban should be upheld. Chief executive at Which?, Peter Vicary-Smith said:

"Payment protection insurance has been widely discredited, so it's important that it's sold separately from other financial products to help consumers make informed choices about how best to protect their finances.

"Rather than appealing the Competition Commission's decision, Barclays should concentrate its efforts on developing protection products that offer better cover and value for money to its customers."

Get payment protection insurance quotes »

© Fair Investment Company Ltd