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MPPI offers better value than PPI

There are other providers of Payment Protection Insurance [Short-Term Income Protection] and other products designed to protect you against loss of income. For impartial information about insurance, please visit the website at www.moneyadviceservice.org.uk.

Advisers who sold mortgage payment protection insurance (MPPI) generally provided better information and quality of advice than sellers of other forms of PPI, according to the Financial Ombudsman Service.

Richard Thompson, lead ombudsman, PPI, said another difference is the cost. He explained: “We often find MPPI policies offered better value- and were more flexible-than other types of PPI. But the affordability of the policy is just one aspect we look at when we’re considering a PPI compliant.”

The overall uphold rate for MPPI is lower than for other forms of PPI but although MPPI policies generally represent better value for money and are usually better-explained to customers, that doesn’t mean things don’t go wrong.

Thompson said: “Where we do uphold an MPPI compliant, it’s often because there were restrictions relating to self-employment or pre-existing medical conditions that limited the level of cover. These restrictions weren’t explained properly to consumers who were self-employed, or who had pre-existing medical conditions. This is an issue we see in complaints about other types of PPI.

“We also see cases where consumers weren’t told that the policy was optional-thinking instead that it was part and parcel of the mortgage. It’s in circumstances like these that we tend to agree MPPI has been mis-sold.”