Payment protection insurance (PPI) is often not offering consumers good value for money or adequate protection, according to consumer watchdog Which?
The Office of Fair Trading (OFT) shares these concerns and has referred the PPI industry to the Competition Commission for investigation.
If PPI providers cannot explain themselves to the commission’s satisfaction, the body has the power to impose remedies as it sees fit.
Such remedies may take the form of fines, new regulations or an order to pay refunds to customers mis-sold PPI policies, among other possibilities.
“Despite some evidence of a degree of consumer satisfaction with aspects of the product, the evidence as a whole suggests consumers get a poor deal,” explained OFT chief executive John Fingleton.
He added that the referral will enable the Competition Commission to undertake a “thorough” investigation of the market.
Consumer group Which? welcomed the decision to investigate what spokesperson Paula Houghton described as “an industry that is systematically dysfunctional”.
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