Barclays starts PPI appeal

7th Sep 2009 12:30

Barclays today went to the Competition Appeal Tribunal to attempt to overturn to the Competition Commission's proposed ban on the sale of payment protection insurance (PPI) alongside credit agreements.Barclays is tackling the ban on two specific issues. '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,' it said. 'Additionally, the scope of the market definition set by the Competition Commission is being challenged,' it added.PPI, sold most often to cover possible sickness and unemployment, has received consistent criticism from consumer bodies, which argue it is expensive, often irrelevant and hard to claim when the need arises.In making its recommendations to overhaul the sale of PPI, the Competition Commission estimated that the UK public is being overcharged by £1.4bn every year in PPI sales. Under the new rules, companies will have to wait seven days to sell PPI to any customer who takes out a credit agreement. The vast majority of 12m PPI policies in Britain are sold at the point of sale of a financial product.State-controlled Lloyds Banking is backing the appeal along with Shop Direct Financial Services.Lloyds said that it believes consumers will be disadvantaged by a point of sale ban, warning it 'could potentially leave thousands of customers exposed at a time when protection has never been more important.'Barclays' challenge to the proposed changes is being opposed by the Competition Commission and the Financial Services Authority. The Tribunal is expected to sit for up to five days to hear the submissions from both sides, but a judgement could take three months.