In evidence given to the Competition Commission as part of its ongoing inquiry into PPI, Chris Cummings, director-general of AMI, stated it was crucial that consumers clearly understood that accessing credit was not conditional on buying PPI.
AMI emphasised that PPI played an important role in protecting consumers, but it remained only one of the products that could be sold to meet consumers’ needs. It was highlighted that there was a need to understand that mortgage payment protection insurance (MPPI) was different to PPI and was a valuable product when it was properly sold as part of a suite of products.
AMI also pointed out it had produced guidance for its members on advising on MPPI that set out clear requirements for the topic.
Cummings said: “Good advice begins with an assessment of the consumer’s attitude to risk together with a review of personal and family assets that can be called on if necessary. It includes an assessment of any employer’s scheme. An independent intermediary can also explain MPPI’s context within other protection products.”
James Cotton, mortgage specialist for London & Country, commented: “It’s a valid point to de-link PPI, but the main thing is to improve the image of the product and make it more value for money. Often PPI is not explained as clearly as it could be and people get unsuitable, expensive products or none at all. What we might find is this leads to a middle ground where people take products that are suitable and value for money. But to do that needs the support of the industry and providers.”
