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C&G hits back at claim it is ripping off MPPI clients

Cheltenham & Gloucester has hit back at claims by Britishinsurance.com that it is ripping off customers with its mortgage payment protection insurance.

Research by Britishinsurance.com names C&G as being the lender with the highest charge for MPPI.

Simon Burgess, managing director of Britishinsurance.com, says: “Our research shows that consumers insuring an average monthly mortgage payment of 604 could save some 3,316 over the lifetime of a 25-year mortgage. The most expensive lender is profiteering by 6,795 and even the cheapest results in consumers overspending by 1,722.”

Burgess says his firm supports the Office of Fair Trading’s call for high street firms to stop exploiting customers and has launched its own MPPI insurance product to combat this.

He says one of the advantages of this product is that it has tax-free claims benefits payable from day one, instead of being subject to the usually 60-day excess period. The firm names itself along with NatWest and Alliance & Leicester as having the lowest charges.

But Sacha Hardy, spokeswoman for C&G, disputes this and says: “C&G’s Pay- ment Protection Plus product is designed to provide a high level of benefit to customers when they need it most.

“Unfortunately, price comparisons by Britishinsurance.com are not on a like for like basis as the additional cash sum automatically payable under the C&G policy is not considered when calculating competitor premiums.”

She adds: “It is also important to note that the C&G PPP policy premium is calculated as 50p per 1,000 borrowed. This method of calculation tends to be linked to the monthly benefit amount – pounds per 100 of monthly mortgage repayment. The advantage the C&G policy gives customers is that when interest rates rise, the MPPI premium doesn’t.”

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