12th February 2007

Association of Finance Brokers stresses the need for Professional Indemnity cover

Association of Finance Brokers stresses the need for Professional Indemnity cover

Carrying Professional Indemnity (PI) insurance will be of increased importance following the introduction of the Consumer Credit Act in April 2007, the Association of Finance Brokers (AFB) has advised.

The Association warns that increased levels of protection for consumers through the Financial Ombudsman Service (FOS) is likely to lead to a greater number of complaints against secured loan brokers.

Robert Sinclair, Associate Director of the AFB, said: "The implementation of the new Act will bring a number of major changes for secured loan brokers."

He added that brokers should "consider the need for professional indemnity insurance for consumer credit activities and review their record keeping procedures".

Under the terms of the Act, consumers may file a complaint based on any action or inaction from their lender which they believe is "unfair".

Meanwhile, the previous limit of �£25,000 on regulated agreements is to be lifted, potentially resulting in larger claims and a need for larger PI limits.

“Changing regulation can be a minefield and this demonstrates the need for a specialist PI broker, in order that you are kept up to date with the latest developments and are fully covered at all times” said Warren Putt, an Account Executive with PYV Ltd, a niche Lloyd’s Broker. PYV have recently revamped their exclusive mortgage facility which is placed with the St Paul Travelers to provide “unbeatable value and exceptional protection”. For more details on this and other services, visit http://www.pyv.co.uk/ .