Having heard continuous reassurances from mortgage industry trade bodies that payment protection insurance is not a problem for mortgage intermediaries, I found it ironic that the first penalty handed out by the FSA in relation to this misselling scandal should be to exactly such a firm.Furthermore, who is to say that Regency Mortgage Corporation’s 56,000 fine will not be the first of many? In the sub-prime market, where Regency primarily operates, those wanting to be perceived as treating customers fairly now have no option other than to be whiter than white – because the repercussions of misselling policies to those with limited financial means can be horrendous. It would be no surprise if further mortgage intermediaries succumb to the wrath of the regulator in the next few weeks, and I feel that it is time for spokespeople from the likes of the AMI and the CML to urge their members to get their acts together on PPI. Complacency can be a dangerous commodity and, in view of the fact that this first fine relates to a regulatory visit made in August 2005, who is to say that the mortgage broking community is not sitting on a ticking timebomb? I am delighted that the FSA has finally begun to hand out punishments in relation to this “protection racket”, but, having gained considerable knowledge of the sales practices of some mortgage intermediaries, I have to admit to being a little nervous about what might be lying beneath the tip of this particular iceberg.
Managing director, Britishinsurance.com