Steve Devine, director of Cardiff Pinnacle, said:
“PPI is attracting a disproportionate amount of media attention. I think PPI has been used as a stick to beat up the banks, but everyone is trying hard to deliver the right product to the right people for the right reasons. However, things will go wrong sometimes. There is a campaign against the product because it contributes to the banks’ profits. This is just undermining confidence for consumers, intermediaries and bank staff. PPI has received a lot of regulatory scrutiny and the media is backing it up. It’s in everyone’s interest that consumers know what they are buying and why, but there are better ways of raising awareness. All the scrutiny is on the industry, but there has to be consumer responsibility as well to read all the paperwork and understand it.”
Thomas Reeh, chief executive at blackandwhite.co.uk, added:
“The programme was very poorly balanced, because the government is all for PPI cover. No one’s talking about protecting customers and there are good policies out there that don’t get air time. Yes, banks that sell poor and unfairly priced policies deserved to get hammered, but less than one in four people have cover and that is dangerous. All PPI is being lumped together and the mortgage industry is being tainted with it. We need to be clear that PPI on credit cards, loans and mortgage payments are very different. People will come out a lot worse if they can’t make their mortgage repayments than not paying their credit card bill. Insurance is sold, not bought, and intermediaries need confidence the products are good and compliant. The industry needs to be educated in a fair and unbiased manner on the good products out there. We also need a lot more commentary on why cover is important. Intermediaries are under an obligation to their clients to explain the merits of having and not having cover and I think a lot of intermediaries have backed away from it completely.”
James Cotton, mortgage specialist for London & Country, commented:
“Insuring against loss of income is important for people, specifically when it comes to covering mortgage payments. It’s not right to write PPI off in one fell swoop. What people need to do is identify the better policies out there that are fairly priced and where to get good advice. However, in some cases you do get the sense it’s being sold for commission and not because it’s right for the customer. Yet, you can’t just say it’s a mis-selling scandal. People do need to know more about PPI. They should get advice and not just sign up for it straightaway.”
Paul Thompson, chief executive at the Swansure Group, said:
“So long as PPI is sold properly it has its place in market and can offer a real protection for people. Bad publicity for PPI is very negative for consumer confidence when there is a genuine need for the product. The key to selling PPI compliantly is that it should be sold to a client based on their demands and needs. There needs to a balance, whereby those who are mis-selling are exposed but at the same time consumers remain aware that PPI is a valuable product. The problem is people will always focus on the bad. Consumers who are worried about obtaining compliant PPI advice look on the FSA website and read what they explain good PPI advice should entail.”
