Plans to prohibit the selling of payment protection insurance (PPI) at the same time that loans are being issued have been announced by the Competition Commission.

PPI provides borrowers with the means of paying off loans or mortgages if they cannot pay due to illness or job loss but it has been the subject of concern and complaints because of allegations of mis-selling. As a result refunds and compensation have been made to many borrowers.

A report found that most of the 12 million PPI policies were sold when the consumer took out their loan but few realised they could shop around for a better deal and buy the insurance from other companies.

Profits from this activity are significant and Barclays, supported by others, challenged the report’s finding arguing that the convenience of buying PPI on the same day was a benefit for many consumers and ensured they had protection.

However, on further investigation the Competition Commission considered that Barclay’s argument was overstated and that a more competitive market would benefit borrowers.

After a final consultation period a decision is expected in July and if upheld, the Commission will implement its plans without delay.

Do you feel you have been mis-sold PPI and don't know where to start?

If this is the case then we have our very own easy to read questions and answers, Letter 1 template to request your terms and agreement and Letter 2 template to demand a refund, all free here at the DebtWizard guide to Payment Protection Insurance (PPI).