A new report by the Competition Commission has found that many borrowers pay more for the insurance on their loans than they do interest on the debt . Many of the affected borrowers are thought to be car finance customers.

Campaign groups who have been trying to bring rip-off protection insurance policy premiums into the public domain welcomed the report. Both credit card and loan customers have unwittingly purchased incredibly expensive payment protection insurance policies unnecessarily.

This type of insurance policy is often sold alongside vehicle finance when customers borrow money to buy a car, but it may also be sold with other loans, mortgages and credit cards .

The deputy chairman of the CC, and chairman of the inquiry Peter Davis reportedly commented: After examining a substantial amount of evidence, we think there are some areas that we need to explore further... The evidence we have seen suggests that the cost of PPI is in some instances higher than the interest paid on loans.