Ppi Is Not Mppi, Trade Bodies Tell Commission
The Competition Commission has come under fire from industry trade bodies for failing to make the distinction between standard payment protection insurance and mortgage PPI
Provisional findings of an investigation into PPI published by the commission revealed UK consumers had been overcharged by £1.4bn a year through payment protection sales.
However despite the commission's own admission there was little evidence mortgage providers subsidised rates with MPPI sales, the commission concluded there is no difference in the fundamentals of various PPI markets.
However a thematic update by the FSA in September 2007 stated: "Our latest work has confirmed our earlier findings that sales of regular premium prime mortgage payment protection insurance, on an advised basis, are most likely to meet our requirements."
At the time of the FSA's findings Chris Cummings, director general of the Association of Mortgage Intermediaries and sister body the Association of Finance Brokers, said he hoped this would lead the commission to drop MPPI from its investigation.
However this hope has proved unfounded leaving both bodies concerned about the commission's proposals.
Robert Sinclair, director of the Association of Finance Brokers, said: "There is a fundamental difference in the outcomes a consumer faces if they cannot meet their credit card payments, compared with their mortgage or secured loan payment.
"The remedies should reflect these facts, to ensure the widest possible protection for consumers from day one of a secured loan."
Richard Farr, director of Ami, said: "We believe the important role of intermediaries in the advice process has not been fully recognised.
"The MPPI market works for consumers and delivers good value products which are supported by good quality product literature. We acknowledge that there is work to be done in the wider PPI market in terms of clearer information for customers and provision of claims data.
"However, we believe there should be greater recognition of the role of intermediaries in shopping around to find the consumer the best deal."