OFT rapped over 'clouding' of PPI issue

19 April 2006
The latest round in the Payment Protection Insurance (PPI) argument has brought into question the validity of the OFT's announcement that it will launch an investigation into the way policies are sold.

Online provider Paymentcare.co.uk has expressed concern over the fact that the OFT has failed to distinguish between PPI on personal loans and mortgage PPI (MPPI).

The operators of the Internet site claim that the difference between the two forms of PPI is not made clear enough by the OFT and that it will discourage people from taking out MPPI as they believe the industry suffers from the same problems as its loans namesake.

Shane Craig, Paymentcare.co.uk's managing director, said the two kinds of PPI were vastly different: "It is not a level playing field [and] the OFT release clouds the issue.

"Eighty-three per cent of borrowing is on mortgages but MPPI take up is only 17 per cent," he continued, warning that those who do not assume MPPI could be placing their homes at risk if they cannot maintain payments without the insurance.

"Keeping a roof over your head is far more important," Mr Craig added, claiming that the main industry problems with selling loan PPI were muddying the waters between the two, a problem that has now been exacerbated by the OFT.

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