Barclays bank is investing in technology to increase sales of payment protection insurance (PPI), despite damning reports on this type of loan cover from the Financial Services Authority (FSA), the Office of Fair Trading and a continuing investigation by the Competition Commission.

The high street bank has introduced a new IT system at its FirstPlus loans division to make it easier to transfer customers from loan brokers to its sales team. This will help to boost profits from single-premium PPI – a product that consumer groups have branded as expensive and often worthless.

Single-premium loan insurance can become very expensive for borrowers because the total cost of the cover is rolled up into the loan. Borrowers pay interest on both the original loan and the insurance premium. If borrowers pay off the loan early, they often receive no refund on the loan policy. Experts are also concerned about “coupling”, where a lender sells its own PPI alongside its loans, without offering consumers a choice of policy.