Commentators including Complete Mortgage and Loans’ network director Bill Warren and CETA’s managing director David Quick have cautioned brokers over their sales techniques when promoting payment protection products.
Warren said: “I have put our ARs on notice to stop selling five-year protection products. The FSA has made it clear that it does not like the sale of this type pf policy.”
He added: “Many of the people who buy these products have the cost rolled-up into their mortgages and simply don’t realise that in some cases a single claim willkill the policy. Too many brokers have simply seen this as a nice commission earner.”
Quick commented: “Stephen Bland, director of the Small Firms Division at the FSA, made it clear in his speech at the recent BIBA conference that the mis-selling of payment protection insurance is going to be high on the FSA’s list of priorities.
“Payment protection insurance for mortgages and other forms of consumer credit is an important safeguard but it needs to be sold responsibly with due regard being given to the client’s needs and circumstances.
“Selling standard ‘one-size-fits-all’ type policies is no longer good enough and brokers should be prepared for the FSA to get tough on anyone who is guilty of mis-selling.”
Stephen Bland, in a speech given at the British Insurance Brokers Association Conference in Manchester on 7 April, spelt out the FSA’s priorities for the months ahead.
He said: “High on the consumer agenda is the sale of payment protection insurance. The FOS, consumer bodies and the media have all expressed concerns where consumers acquire products on the back of another transaction.
“These concerns are normally about aggressive sales practices, poor value products or excessive profit margins, unsuitable products, small print and complex terms.
“Over the next few months we will be looking at payment protection insurance across the market (including mortgage payment protection insurance and credit card/ loan payment protection), taking action where necessary and identifying good and bad sales practices.”
