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Mortgage firms could fare well in PPI probe

The mortgage industry could escape severe regulatory censure for selling payment protection insurance.

Research agency Defaqto believes that if regulators do investigate PPI selling practices, the mortgage sector “is least likely to require close scrutiny”.

It claims that abuses are far more prevalent in the personal loans and credit card sectors.

But British Insurance managing director Simon Burgess says some product providers selling MPPI in the right-to- buy council house sector are “criminal” in preying on vul- nerable consumers.

Defaqto claims brokers will be the winners in the predicted industry shake-up following investigations by the FSA and the Office of Fair Trading.

But it predicts that single- premium cover, where the total cost of the insurance is added to the loan amount and incurs interest, will be abolished soon, hitting sub-prime mortgage providers.

Associate research director Brian Brown says: “There is not as much customer detriment on the mortgage front. There will be more competition in future and it will be clear that there will be other options rather than lenders to get cover.”

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