The Competition Commission, which oversees and regulates the business world, has called for a ban on controversial payment protection insurance (PPI) being sold alongside consumer credit.

The commission reported last week that PPI was being over-aggressively sold to consumers who may not have needed it in the first place, and who may be unaware of what is actually covered under the scheme.

If the commissions recommendations come to fruition, providers will be unable to offer PPI to customers within 14 days of offering them credit or loans.

The finding was welcomed by consumer protection group Which?. Chief Executive Peter Vicary-Smith said that “This is a huge victory for consumers who have often felt pressured into buying expensive and inadequate PPI products.”

The move was opposed by both the Association of British Insurers and the British Bankers' Association, who warned that it would effectively “kill” the market and could see lenders raising the cost of loans.