The Association of Mortgage Intermediaries is calling for mortgage payment protection insurance to be excluded from the proposed PPI referral to the Competition Commission.
In his response to the Office of Fair Trading’s PPI market study, Rob Griffiths, associate director of AMI, says the MPPI sector is a unique sector and should be viewed differently to the other PPI markets identified by the OFT.
He states: “In the report, OFT itself calls MPPI ‘something of a special case within the PPI sector’ and AMI’s belief is that its special nature, especially the robust MPPI sales processes that have been adopted by mortgage intermediaries, mark the sector out as distinct.”
While AMI shares some of the OFT’s concerns about how consumers buy PPI, it is worried about the use of ‘anecdotal evidence’ within the report and believes the OFT should have used more up-to-date product sales data.
In addition, the association is calling for greater publication of data on PPI, especially from the FSA in terms of the regulatory reporting data requirements, such as sales and complaints data.
It also believes consumers must be clear on what they are covered for through the use of plain English information and there should be a differentiation between advised and non-advised sales, particularly as most MPPI sales are conducted on an advised basis.
Griffiths says most mortgage intermediaries adopt a two-stage sales strategy for the client’s mortgage and protection needs and there is therefore less of a point-of-sale advantage for lenders and distributors in the MPPI sector.
He adds: “We believe the role of the mortgage intermediary in ‘shopping around’ for his/her client is crucial in the MPPI market. We also disagree that mortgage intermediaries would automatically include MPPI in quotes for the mortgage. MPPI is not sold as a ‘must have’ for the consumer and both products are clearly delinked.”
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