The Competition Commission is currently looking into the wider payment protection insurance (PPI) market that includes an investigation into sales of MPPI. However the Association of Mortgage Intermediaries (AMI) is arguing that MPPI be excluded since sales of this insurance differ from other protection products because these are mainly an ‘advised’ sale.
The Managing Director of Burgesses, Sara-Ann Burgess, said: “Just because this cover is sold by an adviser does not mean to say that every sale, or even most sales, has been conducted with the best interest of the customer to the fore.
“It is well recognised that there are unscrupulous advisers out there that will always direct their clients towards those products that make them the most money through hefty commission fees. We already know that lenders use their in house ‘independent’ financial advisers to push their own inflated MPPI policies that boost their bottom lines by millions of pounds every year.
“Given the chequered history that the sales of MPPI policies has, I can see no reason why the Competition Commission should not constitute a major part of the review into the mortgage payment protection insurance marketplace.”
“The Commission has already decreed that single premium PPI, the mortgage protection policy favoured by most lenders, is detrimental to customers and should be outlawed. But even here the trade association is seeking to defend this rip-off cover by saying it may be best for some consumers in some circumstances and its removal could see good firms go under.”
“Let’s face it, firms that are eager to continue to sell single premium policies are not ‘good’ firms. They want to continue to be able to sell it because it rakes in so much money for them and since it is tied to the repayment of the loan, they are guaranteed premium income.”
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