Julian Knight: There's never a good time to be mis-sold a policy

Instead of moaning, PPI firms should focus on making their products fairer

Big moves are afoot in the world of consumer protection. After an eternity considering and consulting, the Competition Commission has pronounced on the future of payment protection insurance (PPI). And you can just tell from the squawks coming from insurers and lenders that the authorities have finally got it right.

This multi-billion-pound industry, which is dogged by atrocious sales practices and overpricing, is to face a fundamental overhaul. The sale of PPI alongside loans is being banned and consumers will only be given the option of buying 14 days after they sign up to the loan, credit card or mortgage. What's more, the sale of "single premium" PPI – where all the premiums are rolled up at the start of the loan term and can attract interest charges throughout – is being stopped.

This marks a victory for fairness and common sense. As for the claims that this couldn't have come at a worse time, with recession biting and jobless numbers rising, well I'm afraid it doesn't wash. When is it ever a good time to have mis-selling? For all those victims of redundancy who benefit from PPI over the coming months as their loan repayments are covered, there will be plenty of people who bought in good faith only to find that due to the myriad exclusions contained in the policy small print, they have their claim barred.

Providers have been too greedy for too long and they have finally killed the golden goose. There are better alternatives to PPI, as Kate Hughes explores on the page opposite.

Ahead of the commission's final report in January, the special interests are lining up for one last push to get it to change its mind. But the commission must stand firm. As for the providers, they ought now to focus overhauling PPI to make it a fairer and much more transparent product. Then it can indeed be an aid in the difficult times to come.

Which website?

Comparison websites also came under scrutiny last week. In its latest report on the sector, the Financial Services Authority (FSA) said that although there had been improvements in how these sites operate, it still had concerns.

I use these sites regularly and although they tend to be good for comparing car insurance policies, other types of insurance don't fare so well, with the quote on screen bearing little or no relation to what is ultimately offered. In addition, some pretty hefty policy excesses are tied into some of the offers, and this isn't always easy to see at first glance.

The FSA, though, is more timid than the commission (although it's just as slow) and still refuses to name those sites that are lacking. You could bet your bottom dollar that if the FSA named names, the press would report them and consumers would know the wheat from the chaff. The law of the market would then force the sites that are failing to sort themselves out.

It may be a relatively minor issue compared to the momentous events of recent months, but it's indicative of the all-too-secretive attitude of the City regulator, which is still more concerned about its relations with the industry than telling the public, whom it is supposed to serve, what is what.