Should mortgage payment protection have been referred?
- 18TH MAY 2007
The Competition Commission is currently investigating mortgage payment protection insurance (MPPI) as direct result an Office of Fair Trading investigation into payment protection insurance as a whole.
The investigation was referred to the Competition Commission when the OFT deemed that the lack of competition in the marketplace hindered the consumer’s ability to obtain a policy that offered good value for money.
However, there has been some criticism over the referral, which is largely because it also included mortgage payment protection insurance, even though the sales practices associated with mortgage payment protection insurance have actually been praised.
It has been found that consumers have generally been informed of the benefits and terms and conditions of mortgage payment protection insurance because it is discussed fully during the course of a mortgage interview. It has also been found that less pressure is exerted on the individual during the sales process.
Whilst mortgage payment protection insurance does provide an individual with a safety net should he or she become to work as a result of illness, accident or redundancy, there is always room for improvement in the marketplace. If there is sufficient competition within that particular sector then the Competition Commission will present findings that reflect that.
One company who applaud the referral of this part of the protection insurance to the Competition Commission payment protection specialists British Insurance. Simon Burgess from the company believes that customers who buy mortgage payment protection insurance do still suffer at the hands of “greedy” lenders.
“The referral can only be a good thing,” Simon commented “as there are still lenders who pressurise their clients in to taking out the cover without informing them that they can shop around for the same cover and often at a much cheaper price”.
With British Insurance, the consumer can already save up to 40% on their mortgage payment protection insurance policies.
