View more on these topics

Brokers must ensure they are prepared for the PPI review

From Richard Angliss

While mortgage regulatory issues are taken seriously and given a great deal of media attention, general insurance and particularly payment protection insurance compliance issues often take second place.

Now that the Financial Services Authority has spelt out its concerns about PPI and announced a large thematic review of this sector, it’s time for advisers who sell MPPI to take urgent action to protect themselves from the possibility of mis-selling this product.

This means that all the points made in the FSA’s press release on January 11 must be covered in every PPI sale and fully documented in case files. These are:

• Making it clear to customers that PPI is optional.

• Giving correct product and price information – explaining eligibility and exclusion issues.

• Recommending a policy that meets customer needs.

• Ensuring that a fair refund on cancellation is included in any recommended product. The only certain way to ensure all of this happens and is documented is to use an effective sales and compliance system.

The Council of Mortgage Lenders has not done the industry any favours by trying to distance MPPI from other forms of PPI and requesting that it be excluded from the Office of Fair Trading’s referral of the sector to the Competition Commission.

The CML is right to be concerned that if consumer confidence in MPPI is undermined sales will decline, leaving more mortgage borrowers vulnerable.

But defending MPPI in this way runs the risk of encouraging complacency about the product at a time when brokers need to improve their compliance performance. FSA enforcement action and fines have already shown that mortgage firms are not above criticism when it comes to PPI sales.

So let’s make sure that we are fit for the FSA’s pending thematic review to minimise the risk of future enforcements and fines.

Richard Angliss
Managing director
Home Buyer Systems
By email


First-time buyers paying over the odds

First-time buyers are so determined to buy sooner rather than later they are prepared to offer above the asking price straight away on the house they want, reveals the Yorkshire’s Housebuyers report.More than one in four first-time buyers would put in the asking price straight away in order to secure their ideal home, while only […]

PMPA hits out at lenders with poor IT links

The Professional Mortgage Packagers Alliance has attacked lenders that have failed to deliver in terms of technology and working with packagers. One sweeping rumour was that the PMPA was referring to edeus although this has been denied. Jon O’Brien, operations director at PMPA, says: “Some companies have been tight-lipped about their dealings with packagers. If […]

Checklist to speed up packaging

Commercial First has introduced a submission checklist to improve speed and accuracy in the submission of packaged mortgage applications. It includes a summary of the application plus a list of documents to be submitted, and is cross-referenced to the product to which the application refers.

Government unveils anti-loan shark projects

Chancellor Gordon Brown has unveiled additional funding to enable the national roll out of a scheme to tackle loan sharks, with a project in every region. Schemes tackling loan sharks have already been piloted in the Birmingham and Glasgow areas and work by improving financial advice for people targeted by loan sharks and exposing and […]


News and expert analysis straight to your inbox

Sign up