Brokers face ban on selling MPPI at point of sale

The Competition Commission has dealt a blow to mortgage brokers by revealing they will not be able to sell mortgage payment protection insurance at the point of sale.

The CC’s remedies into the PPI market which were published earlier in the year had been widely interpreted as allowing mortgage brokers to sell MPPI at point of sale and it would be the providers that would have to wait 14 days before contacting the customer.

However the CC published an update on its proposals on Friday which stated the distributor or broker cannot sell PPI at any point in the original meeting and cannot include PPI in the primary credit agreement.

The broker can provide information and a quote on PPI but not sell the product.

However after 24 hours the customer can buy a PPI policy from another company as long as it is not the one they got the original advice from.

The broker can only sell the product within the 14 days if the client contacts them, the broker is not allowed to contact the client.

Stephen Atkins, director at SAC/Telos Solutions says it is unfair mortgage brokers selling MPPI have been caught up in the CC’s proposals.

He says: “I don’t see any justification in including mortgage brokers in its proposals.

“It seems that mortgage brokers selling MPPI will be made to suffer for shortcomings elsewhere.”

He thinks the move will force a lot of mortgage brokers to start selling income protection instead as there is no ban on this.

The Association of Mortgage Intermediaries has been calling on the CC to remove MPPI from its investigation.

It argues that MPPI is different from the other forms of PPI under investigation for credit cards and unsecured personal loans.