Survey says PPI probe has hit confidence in MPPI

Paymentshield says consumers are shying away from mortgage payment protection insurance as a result of the bad press surrounding the recent PPI investigation by the Financial Services Authority.

A survey by Paymentshield polled more than 1,500 consumers and some 250 brokers on the impact of the regulator’s PPI investigation and how it has affected their concerns and perceptions.

It found that 47% of all home owners are aware of the recent investigation and the criticism of the product. More worryingly, nearly nine out of 10 of those polled believe the criticism applies to all PPI products, including MPPI.

The research also reveals that intermediaries and consumers feel brokers are the best source to turn to for impartial advice on MPPI, with one in three consumers saying they would consult their mortgage advisers. While 24% would turn to their bank or building society, another 21% would ask friends.

Simon Burgess, managing director of MPPI provider Britishinsurance.com, dismisses the research as nonsense and says consumers are simply starting to shop around.

He says: “Providers such as ourselves and moneysupermarket.com are seeing record levels of MPPI business. Consumers have not stopped buying MPPI but are starting to shop around to get the best deals and explore fresh channels such as the internet.”

But Chris Traynor, sales and marketing dire-ctor at Paymentshield, says: “There are serious misconceptions among consumers about the value of MPPI, and people are still confusing it with PPI.

“We believe MPPI is an appropriate product for at least one in three consumers but coverage is falling woefully short, leaving many people potentially unable to meet their mortgage repayments in the event of unemployment or illness.

“It’s vital that consumers receive proper financial advice when taking out these products and mortgage intermediaries are best placed to provide this.”