Nigel Payne, managing director of Assurant Intermediary, says the provisional report says nothing new other than that the Commission thinks that it is more appropriate for consumers to be able to buy PPI at the same time as buying goods from their home catalogue than it is for consumers taking out probably the biggest financial commitment of their lives – a mortgage.
Payne says: “It beggars belief that it believes the proposed remedy package would produce adverse effects on someone buying some designer jeans or a flat screen TV from a catalogue but not on someone buying a home for their family.
“I don’t dispute the aim of the inquiry to ensure that consumers get a fair deal and I believe a more competitive marketplace will result in better products but I’m beginning to doubt whether the final recommendations will achieve this.”
Payne says there is a distinct lack of clarity as to how point of sale will be defined when it comes to consumers taking out a mortgage.
He adds: “While it is clear where the sale process starts and ends for a personal loan, it is not the case when it comes to taking out a mortgage. Is it when the consumer applies for the mortgage, at which stage an intermediary may well discuss how they would protect their repayments? Or is it when the offer is actually made by the lender representing another opportunity to discuss MPPI?
“Or should it be when the mortgage is actually completed? I can’t see any clear reference in any of the documents from the Commission to date as to their definition of the point of sale for a mortgage.”
Payne: “While we wait with baited breath as the Competition Commission seeks further comment before publishing its final recommendation in July, let’s hope that common sense will ultimately prevail. In the times in which we find ourselves, one thing is abundantly clear.
“Consumers need to be able to consider the options available to them when it comes to protecting their mortgage repayments and I personally don’t believe that it is up to a government-funded organisation to tell them when they can and can’t buy insurance cover if that is the path they choose to follow.”