Home Loans
Consumers need protection from payment protection insurance
(presented by www.refinance-refinance.net - mortgage lenders)
By Jack Mack
A year after the Office of Fair Trading (OFT) began investigating the widespread mis-selling of payment protection insurance (PPI), the Financial Services Authority (FSA) has, for the first time, fined a mortgage broker for selling the policies to customers who either did not need them, or on which they could not claim.
The FSA judged in the landmark case that many of those who were sold PPI policies would be likely to have their claims excluded due to pre-existing medical conditions, or already had cover in place from previous mortgages or life insurance. The FSA concluded that the Bournemouth based Regency, which specialises in selling “right-to-buy” mortgages to customers who usually find it difficult to obtain standard credit, did not make sufficient checks on its customers’ full circumstances in order to make a suitable sale. This meant that customers had been sold policies that would never be able pay out, regardless of future events, thus making them worthless as protection for the policy holders.
The OFT started their investigation following a ’super complaint’ by the Citizens’ Advice into the PPI industry which a year ago had an estimated 20 million policies in force and was producing an annual revenue that was in excess of
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