The insurance network believes it is time the FSA made explicit the distinction between its positive view of advised sales of mortgage payment protection insurance (MPPI) and its criticisms of other parts of the loan cover market.
“Brokers are most likely to sell good value products and to comply with Treating Customers Fairly (TCF) rules,” said CETA managing director David Quick. “But we are at the point that advised sales face extinction because consumers are still being fed the message that the whole loan cover industry is a rip-off.”
He said the latest FSA mystery shopping exercise into the unsecured personal loan insurance providers once again gave the consumer media the chance to attack the whole PPI industry, including broker sales of regular premium prime mortgage PPI which the FSA confirmed “is most likely to meet its requirements”.
Quick continued: “This should have been a pat on the back for the broker sector but instead is lost among the FSA’s other criticisms. By not clearly separating good from bad, the FSA is encouraging misinformed and hostile reporting that wrecks consumer confidence in the whole industry.”
CETA’s ‘next generation’ MPPI product developed in conjunction with Cardif Pinnacle costs from £2.20 per £100 monthly mortgage payment, more than 60 per cent lower than many high street mortgage companies would charge.
Quick concluded: “Innovation is taking place in the industry. The irony is that while advisers find their sales are being hindered by the stream of bad publicity, the high street lenders have the luxury of continuing to flog their poor value cover to a ‘captive’ audience who are relying on them to approve their mortgage application.”
