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With losses for the finance industry expected to reach £6 billion this year and the astronomical growth in people taking out Individual Voluntary Arrangements (IVAs) the industry is fighting back by using a service developed by TDX Group.

TDX Group have introduced a sort of centralised Hub whereby the finance industry can pass on applications for an IVA and the centralised source, called The Insolvency Exchange (TIX), analyses information to decide whether to accept or reject an application. If the IVA is accepted the TIX service will help manage it through the five years of the agreement.

Two large banks, HSBC and HBOS, have already signed up to the service. Industry sources estimate that around 10% of IVAs now approved by lenders ought to have been rejected and with the two large banks signed up it is estimated that 2,400 proposals could be thrown out each year.

The banks have been criticising ‘rogue’ insolvency practitioners for pushing people into IVAs, so that they can claim fees of up to £7,000.

The way the exchange basically works is by adhering to the rule that 75% of creditors by value of debts have to agree to an IVA, so the more financial institutes sign up to TIX, the more applications will be thrown out.

Perhaps due to a slump in sales or maybe because of customers showing concern, the Building Societies Association has issued a letter to the Office of Fair Trading (OFT) about MPPI (Mortgage Protection Payment Insurance).

This comes in light of the OFT referring PPI, including MPPI, to the Competition Commission after finding very worrying failings in the way it is sold.

The letter states “We believe that the MPPI sector is fundamentally different to the general PPI sector. This is both in terms of how the product is sold and also customers experience of the product if they have to make a claim. You identified many of these differences in your investigation into the PPI sector and we trust that the CC will, if it goes ahead with an investigation, also identify these differences.

“We note that you found that MPPI products are of better quality than general PPI products. We also note that you found the market to be more competitive than the general PPI market and that better sales techniques are used. As the market matures, we expect both existing providers and new entrants to continue making improvements to both the products themselves and also the ways that they are sold. These innovations will further benefit consumers.

“One weakness of the paper is that it fails to highlight the wide choice of different MPPI products. Although you acknowledge that MPPI can be purchased on a modular basis, you fail to recognise the differences between various MPPI products – while some policies, for example, provide just a very basic level of cover, others provide a whole range of ancillary benefits to claimants such as assistance with finding new employment. This increases not just the range of products available, but also the price of products available to consumers.”

I think in some ways it goes to show that some things prove profitable for companies and then the less scrupulous come along and exploit the market more and more.

The PPI and MPPI story is going to run and run……

There’s always more news on Tuesdays than Mondays. I don’t know if anyone else is like me, but I actually prefer days when there’s a bit of something to digest and think about, not just about boring old loans and stuff, but about anything.

Today there’s been a couple of pieces of news coming out of the Office of Fair Trading (OFT). I find it interesting that they’ve formed a new task force called the Payment Systems Task Force. This is in tandem with the establishment of a new governance body for payment systems, the Payments Industry Association. This follows a recommendation from the OFT to the Treasury and I presume is to get consistency in how Banks and other finance bodies clear cheques and the timing from which they pay interest. There’s a press release about it on the OFT site.

At the same time (well yesterday actually) the OFT announced the appointment of Jonathan May to the post of Executive Director of Policy and Strategy. Both of these articles are quite interesting given the OFT announced its reorganisation a short time ago.

Following yesterday’s news about Money Partners et al, it’s interesting they’ve now announced plans to go direct to broker. They’ve announced a new channel brand called Money Partners Touch, which will be dedicated to non-packaging brokers, introducers and IFAs.

Operating out of Residential 1’s Bromley offices, it will provide introducers and advisers with processing and packaging services, electronic decisions, online case management and direct access to Money Partners’ full range of specialist mortgage products

The Residential 1 brand survives as a wholly-owned secured loans broker subsidiary of Money Partners. Interestingly, it will operate with a separate management and staff, and will continue to offer secured loans from a panel of providers - perhaps the acquisition was just to exploit a new channel or maybe they don’t want to rock the Residential 1 boat too soon, although they also say there will be no redundancies.

Colin Sanders, Money Partners’ chief executive officer, said: “The next phase in our development is to take the Money Partners proposition to the wider, non-packaging introducer community. We’re not the first to do this and I won’t try to gloss it up as a ‘next generation’ offering. What we will do is keep it simple and straightforward because we want introducers to have access to our products in a way that works for them and their clients.”

So the bottom line is introducers can now go direct to Money Partners.