PPI provider to offer bespoke solutions to secured loans industry
Brokers concerned with adhering to the FSA’s Treating Customers Fairly (TCF) policy can ensure their secured loan customers get a fairer deal on payment protection insurance (PPI) by offering a stand-alone monthly paid policy, says independent PPI provider Paymentcare.co.uk.
Shane Craig, managing director of Paymentcare.co.uk said: "Stand-alone PPI policies offer customers a credible alternative to expensive lenders-own offerings and provide much better value for money."
The FSA’s recently published Insurance Conduct of Business (ICOB) review of the general insurance market indicate that consumers purchasing PPI continue to run a significant risk of signing up for poor value for money products.
Craig added: “With the FSA due to publish a consultation paper this month (June)* setting out proposed rule changes to the way PPI is sold, it’s highly likely that the soaring secured loans industry will need to address the issue in order to satisfy the ICOB recommendations.
“PPI is an integral part of the secured loans process and it’s essential that intermediaries are aware of the PPI policies available to them. This will help to ensure that they treat their customers fairly.”
By offering an independent option brokers can ensure their customers are buying PPI with their eyes wide open
Single premium loan PPI has attracted considerable criticism since the investigation into PPI began.
Craig said: “Since the launch of the Office of Fair Trading’s investigation of the whole of the PPI market in September 2005, it has become abundantly clear that single premium loan PPI policies are not in the customer’s best interests.
“The cost of these policies is added to the loan and the whole amount then gathers interest, making the PPI exceedingly more expensive than necessary. A monthly paid policy from an independent provider offers far better value for money and can be cancelled at any time ensuring that customers only pay for the cover they actually need.
“Intermediaries must be clear on what it covers, what it costs and the fact that it is entirely optional. Because PPI is a secondary purchase and therefore not the customer’s primary focus, it is often the case that they sign up for policies that they do not fully understand.
“By offering an independent option brokers can ensure their customers are buying PPI with their eyes wide open.”