I was thinking of a new range of mortgages for the club, which recently launched its first savings account. I’d got as far as the Nakamura Mortgage – you can pay it off with one hit – and the Saha Penalty Mortgage – miss a payment and you get kicked out. But then I decided that the idea was too frivolous even for me and now that I have my own fan club (membership: one, see last week’s letters) I have standards to uphold.
So I’m turning my attention to the Paymentshield scandal. Brokers are understandably furious that Paymentshield is refusing to pay renewal commissions to those not regulated by the Financial Services Authority. Leaving aside the irony that the sellers, rather than the customers, are getting stiffed by a payment protection insurance provider, the brokers do seem to have been badly treated.
They were promised commissions into eternity as long as their customers continued to pay premiums. And now those promises are being shredded as a supposed consequence of regulation. I’m pretty sure that if Paymentshield wanted to continue passing on these commissions to brokers it would find a legal way to do so. If it genuinely can’t, it should refund them to customers with the suggestion that they pass the money on to the broker who earned it.
The worry for brokers must be that other companies see Paymentshield getting away with this scam and adopt it as an ongoing profit-enhancing policy. There has been some talk of brokers forming an action group to fight Paymentshield. I wish them luck. In my experience, action groups need to win a lot of public support to get anywhere with their causes.
Victims of the Farepak collapse who lost their Christmas savings were quickly latched onto by ambitious politicians, but members of the Pensions Actions Group battling to regain stolen company pensions are still struggling. Their right to compensation has been backed by the Parliamentary Ombudsman yet protests have failed to budge the government. They have the support of the public and the media but their case is still unresolved.
How much harder will it be for brokers, who won’t get support from the press or public, to fight for their lost commission?