Unsuitable protection policies being sold, claims council – New scandal hits mortgage lenders
BOURNEMOUTH DAILY ECHO - 10TH FEBRUARY 2004
Mortgage borrowers who insure against losing their jobs are being sold expensive and unsuitable policies by many major lenders, it is claimed.
The big lenders are also neglecting to tell customers that they have the right to shop around for the mortgage payment protection insurance policies say critics.
The General Insurance Standards Council is concerned about the way the mortgage payment protection insurance is being sold. “There is evidence that an awful lot of this insurance is sold to unwitting customers” said a GISC spokesman.
“They are being sold something they don’t want, which is morally wrong and bad business practice, and in many cases they are being sold loan protection insurance that is of no use – and that is fraud”.
Burgesses is the latest independent insurer to have done a mystery shopper exercise to investigate the way that mortgage payment protection insurance is being sold. Posing as potential customers, Burgesses staff phoned 25 lenders to obtain a mortgage with mortgage payment protection insurance.
“All 25 lenders failed to inform Burgesses staff that they could shop around for a better rate and save themselves £2,745 over the lifetime of their mortgage” Said a Burgesses spokesman. “Only one lender asked about medical history or informed them that pre-existing medical conditions are automatically excluded from mortgage payment protection insurance.
