MPPI tarnished by PPI brush
Following an FSA review of the PPI market, the regulator confirmed its review had highlighted poor selling practices and lack of proper compliance controls of PPI. A number of MPPI providers have suggested the criticisms surrounding PPI have been unfairly transferred to MPPI.
Chris Traynor, sales and marketing director at Paymentshield, said: “MPPI has unfortunately got a stigma attached to it as a result of PPI. Intermediaries have to recognise the difference between the two and emphasise the benefits MPPI can provide to the consumer. It is also a way of demonstrating fair practice and if you don’t recommend MPPI, a client may come back to you two years down the line saying he had lost his job, or other circumstances had changed and he was unable to meet his mortgage payments. If that happened then surely the brokers would be questioned why MPPI cover wasn’t recommended.”
Shane Craig, managing director at Paymentcare, added: “The one downside of the adverse publicity surrounding PPI is that the distinction between PPI and MPPI has become blurred in the minds of consumers, which has been to the detriment of both consumers and mortgage intermediaries alike.”
Kim Barrett, proprietor at KS Barrett & Associates said: “When considering that the Department of Works and Pensions (DWP) will not provide any support to a mortgage account holder who loses their job through sickness, accident or redundancy, for at least nine months, such insurance could be vital. If you approach the DWP with a claim, it will ask why such insurance is not in place and encourage you to pursue any adviser who didn’t recommend the insurance when a mortgage is taken out. Any MPPI holder is always grateful if circumstances arise under which a claim needs to be made.”