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Antitrust authorities in the United Kingdom have released details about their proposed crackdown on insurance for credit cardholders while awaiting an appeal of their proposal from one of the country's largest financial institutions. The UK's Competition Commission this week published a "draft order" that could lead to a seven-day waiting period on the sale of "payment-protection insurance" to credit card, mortgage and other customers worried about their ability to pay back loans. Most of the 12 million such policies cover credit cardholders. The commission also wants issuers to provide consumers with "personal PPI" quotes that clearly state the cost of the policies and to provide access to other information to stop what regulators view as a lack of transparency and competition in the market. Publication of the draft order, which details how the commission would implement the changes, come amid a call for comments about the proposal, a commission spokesperson tells CardLine Global. "We might hear from one or two consumer groups," the spokesperson says. The commission hopes to make the changes by October 2010. Exactly what changes it can make, however, could depend on the results of a case before the UK's Competition Appeal Tribunal. Barclays PLC is challenging the commission's proposed ban on selling the insurance at the point of sale, raising issues including "whether benefits of … intervention would outweigh the extent of consumer detriment," according to a summary of the complaint from the tribunal. The tribunal has scheduled a hearing for 7 Sept. to 10 Sept., though it was unclear when it would render a ruling. UK financial institution Lloyds TSB and Shop Direct Group Financial Services Ltd. are backing Barclay's appeal, while the Financial Services Authority, a UK regulatory agency, is backing the commission.
