Rethink on sale of protection cover

The Competition Appeal Tribunal called on the Competition Commission to reassess why it thought the ban was needed.

The move follows an appeal by Barclays against the decision to ban the sale of insurance alongside credit cards, loans and mortgages from October next year.

Barclays argued that the ban was disproportionate and not justified by the evidence collected by the commission as part of its investigation into the issue. It said the Commission also failed to consider the consumer detriment that could arise as a result of the ban.

In its judgment, the Competition Appeal Tribunal said: "The tribunal concluded that the Commission had failed to take into account the loss of convenience which would flow from the imposition of the point of sale prohibition in assessing whether it was proportionate to include it in its proposed remedies package.

"In the tribunal's view, this constituted a failure to take into account a relevant consideration, and the tribunal has therefore decided to quash that part of the report which imposes the point of sale prohibition as part of the proposed remedies package."

It added that it was asking the Commission to reconsider whether the point of sale ban should be included in its measures to boost competition in the market for payment protection insurance (PPI).

Barclays, which was supported in its appeal by Lloyds Banking Group, in which the Government holds a 43% stake, and Shop Direct Group Financial Services, welcomed the judgment.

A Barclays spokeswoman said: "We are pleased that the Competition Appeal Tribunal has ordered the point of sale ban to be reviewed.

"Barclays has always held that the ban limits rather than enhances customer choice which is why it formed the main focus of our appeal. The Competition Commission will now have to reconsider this remedy and the background to it. We will of course welcome the opportunity to continue to work with the Commission as they rework their analysis."