Banks face payment protection curb

Banks will no longer be able to sell payment protection insurance (PPI) alongside the credit cards, mortgages and personal loans it is designed to cover, the Competition Commission has confirmed.

The ban was delayed following a challenge by Barclays, which claimed it was not justified and would cause inconvenience for consumers. Providers will now have to wait seven days before they can contact customers to sell them the insurance. Single premium PPI policies, in which the cost for the whole term of the policy is paid upfront and added to the debt, are also being banned.

The decision has no bearing on a British Bankers' Association challenge against complaints handling rules coming in in December. The case, unlikely to be heard before April, means thousands of consumers face a long wait for compensation.