The broker insurance network is concerned that the Office of Fair Trading’s decision to refer payment protection insurance to the Competition Commission will result in a decline in MPPI sales and an increase in the number of borrowers at risk of losing their homes.
David Quick, managing director of CETA, estimates that sales of MPPI have fallen by as much as 50% since the OFT started investigating the PPI sector. He warns that brokers are scared of selling MPPI and consumers are being frightened off because the tabloid press has confused PPI with MPPI.
In response to this, CETA is developing an advanced fact-find that will allow brokers to feel confident about selling MPPI. It hopes to launch this within a few weeks.
Quick says: “We are offering brokers the option of carrying out a more detailed fact-find which will have questions on sickness benefits placed more prominently and also include additional questions.
“We can’t force brokers to use it but should they get a visit from the Financial Services Authority this offers them the chance to show they made every effort to find out about customers.”
Thomas Reeh, chief executive of blackandwhite.co.uk, which insists clients sign disclaimers if they decline or cancel MPPI, says: “Good for CETA. Broker confidence has been knocked and MPPI only has 25% penetration, well below the government’s target of 55%.
“With repossessions and individual voluntary arrangements on the rise, MPPI is more important than ever.”