From Steve ClowesIn response to the super complaint lodged with the Office of Fair Trading by the Citizens Advice Bureau, as a responsible practitioner in the payment protection market I welcome any independent review that helps the FSA stamp out non-compliant fringe markets and the anti-consumer practices that regrettably occur. But I am concerned that this complaint will result in national media and consumer bodies lumping the good in with the bad. In their haste to highlight the poor practices that continue to blight the industry they might fail to recognise there is a genuine need for this type of protection, particularly associated with mortgages. If payment protection products are greeted with a knee jerk reaction, this could cause the sales of genuinely needed protection policies to fall and result in an increase in mortgage possessions. A number of providers of these policies, including Millennium, have gone above and beyond the benchmark mortgage cover recommended jointly by the Association of British Insurers and the Council of Mortgage Lenders to create protection products that put the consumer first and stand up to the criticisms of the CAB. For example, the cost of protection has come in for criticism but many products available to consumers through financial advisers cost as little as 80p per day for a monthly benefit of 500. These consumer-friendly policies do cover medical problems such as bad backs and mental illness – two of the exclusions highlighted by the CAB in its complaint – as long as the claimant has medical evidence such as an MRI scan or a consultant diagnosis – hardly an excessive demand by insurers who have been subject to extensive fraud in these two areas. The regulator, insurers, providers and distributors of these products must come together and create a framework that stamps out non-compliant practice and puts the customer at the heart of the product and service delivered. And insurers and providers must double their efforts to ensure advisers understand what they are offering and, more importantly, customers know what they are buying.
Awareness and training are needed, not the destruction of the product.