It’s little wonder that lenders are fighting back in the payment protection insurance battle, given that Morgan Stanley forecasts the bill across the banking sector could hit £5.1bn over five years – £2.1bn more than the Financial Services Authority’s estimate.
The British Bankers’ Association is seeking a judicial review of how the FSA and Financial Ombudsman Service handle PPI sales complaints, arguing that they are judging the way they were sold by rules that were not in place at the time.
Not many people will have sympathy with the banks – certainly not those who have been mis-sold cover they can’t ever claim on. This creates a PR problem for brokers who are trying to sell insurance that will protect their client should the worst happen.
But according to latest figures from the Association of British Insurers, of the 9,443 PPI complaints received between January and November last year, only 76 related to mortgage payment protection insurance.
Now that point-of-sale PPI is to be abolished, brokers have a chance to prove their worth by selling tailored cover to home owners during the enforced seven-day cooling off period.
Recent moves to restrict sickness and housing benefits and a bleak outlook for the economy means consumers will be seeking to protect their lifestyle.
Income protection products can cover a wide range of household expenditure. So brokers should coax clients to take out this cover and make themselves extra income.