Fears for mortgage payment protection Insurance brokers have undoubtedly experienced a drop in the number of sales of mortgage payment protection insurance (MPPI) in recent months as a result of recent Financial Services Authority (FSA) and Office of Fair Trading OFT investigations into consumer claims that they were not being treated fairly.
Scrutiny of the payment protection insurance sector has found that there have been questionable practices employed to sell the policies for quite some time. The FSA has previously acknowledged that mortgage payment protection insurance policies and payment protection insurance policies offered by lenders are completely separate entities in terms of sales practices and had largely been sold in a compliant way.
However, that has done little to allay consumer fears. Brokers claim that the bad press the industry has received has tarred all forms of payment protection insurance with the same brush, thus reducing sales and leaving individuals with mortgages without sufficient protection.
Mortgage payment protection insurance does protect consumers because it can effectively provide financial aid for individuals who find themselves unable to work for a period of time through illness and unemployment. It is therefore an essential policy for any homeowner.
While consumers will be offered - and some will say ‘forced’ - into taking mortgage payment protection insurance with their mortgage lender, they would do best to shop around and buy a standalone policy from an independent provider. Specialist payment protection provider British Insurance provides mortgage payment protection insurance on an independent basis for up to 40% less than high street providers and can also provide the consumer with the peace of mind and confidence in the industry that they may have lost.