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The OFT transferring PPI to the Competition Commission could be seen as getting rid of a Hot Potato - but it was a struggle to find a picture of a potato that looked “Hot”

I’ve had a first glance at the OFT’s report into the Payment Protection Insurance Market and its subsequent transfer to the Competition Commission and it’s quite an eye opener. One of the most shocking things was when they reported finding a loan with a headline APR of 5%, but when you added in the PPI cost, the true APR came out at a whopping 13%! I’ve often written about this subject and always had the view that it was unfair to consumers that the APR didn’t include the PPI cost and it’s always presented a loophole for the less scrupulous loan dealers to exploit.

I’ll be posting more about PPI as the story unfolds, but in the mean time, I’ve extracted the points relevant to the secured loans market and created a second OFT/PPI page. The page includes an ‘Executive Summary’ and is well worth a read if you don’t get time to read the whole thing.

Perhaps this is a solution to the finding a Hot Potato image problem

The OFT has announced today that it is referring the Payment Protection Market (PPI) to the Competition Commission and rather than prattle on about it in an incoherent manner, I’d prefer to appraise the situation prior to doing a more detailed post about it later.

At first glance, there doesn’t appear to be any new findings in the press release, but it’s interesting to note the comments of the OFT’s Chief Executive John Fingleton ‘Following the work we have undertaken it is clear that many consumers are failed by PPI - insurance which gives them a poor deal and often less protection than they think. There is limited evidence the industry is taking steps to improve the situation, but we believe they will not make major improvements to competition in the market. Given our evidence and the scale of this market, our provisional view is that it would be appropriate for the Competition Commission to investigate further.’

At some stage I’ll also update the page OFT report on PPI to include sections relevant to the secured loans market.

Well, so far it’s been a pretty uneventful Monday. On the domestic front, my telephone line’s playing up and, as it affects my umbilical to the Internet microcosm, it’s proving to be a bit of a pain in the backside. No doubt my call to the BT faultline has galvanised a legion of Engineers to lay down their tea mugs and dissapear down some cable warrens - let’s hope so - I hate being ‘unconnected’.

On the work front, a trawl through the likely places reveals that the British economy is taking time to warm up. I find the old one about always giving 100% at work to be actually quite factually accurate.

One thing that did catch my eye is some news from a website called securityfirst.co.uk who say that their new range of age related Payment Protection Insurance (PPI) policies have greatly reduced the cost.

The youngest policyholder at 18 will for example, pay £1.60 per £100 of monthly mortgage payment protection insurance, £1.75 for loan and £1.85 for income cover. Those unable to work due to an accident, sickness or involuntary unemployment will receive a pay out for a maximum of 12 months.

Now this is all very well and I take my hat off to the Company behind the site for being innovative, but the thing I find strange is that this is yet another website launched by British Insurance. You may remember, I once posted about this before and I still find it strange that, albeit with different demographies to target, that a Company would put so much time, money and resource into launching so many websites.