The final phase of the Competition Commission order on the sale of payment protection insurance has come into effect.
But a significant number of firms say they are still confused when it comes to selling mortgage payment protection insurance.
The prohibition de-links the sale of these covers from the sale of the mortgage.
It applies an exclusion period to advisers but customers can buy MPPI online or by telephone 24 hours after the mortgage or remortgage application has been submitted, so long as the customer has initiated the transaction.
When an adviser is arranging a mortgage or remortgage, they can provide an MPPI quote at any time – they just can’t sell it until seven days after either providing the quote or seven days after the date the lender makes a formal mortgage offer.
MPPI cannot be pre-sold or included in the mortgage agreement. There are no restrictions on the sale of MPPI after this period but intermediaries must ensure their customer has seen a personal MPPI quote before a sale can be made.
Sales made six months or more after the mortgage sale are treated as standalone and aren’t subject to the point-of-sale ban.
Products such as MPPI have provided a lifeline for many consumers and it would be wrong for intermediaries to deny them the opportunity to purchase them because of changes introduced by the Competition Commission.