The OFT’s chief executive, John Fingleton, commented that the consultation phase had borne out concerns that the market was not duly competitive, justifying further investigation by the Commission.

There are, he said, “reasonable grounds to suspect that there are features of this market which restrict competition to the detriment of consumers”.

“The evidence as a whole suggests consumers get a poor deal,” Mr Fingleton added.

Consumer company uSwitch.com called for the Competition Commission to make public its findings as soon as possible, emphasising that the PPI market is constantly gathering new custom.

Meanwhile, the Financial Services Authority (FSA) is conducting a parallel investigation into the selling standards employed in the industry and last week fined GE Capital Bank £610,000 after finding the store card provider had been mis-selling PPI.

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