Many sellers of loan protection are not yet paying sufficient attention to FSA regulation according to...
Many sellers of loan protection are not yet paying sufficient attention to FSA regulation, according to a new independent mystery shopping survey commissioned by British Insurance.
The findings echo those of a similar mystery shopping exercise undertaken recently by the FSA. They reveal a massive gulf between how loan protection is supposed to be sold and how it is sold in practice, as well as a huge variation in the prices charged.
The survey investigated loan protection sold by lenders chosen from the High Street, national newspapers, the internet and the telephone directory.
Among the problems it found, the survey discovered that lenders do not always adhere to FSA rules that oblige them to make it clear whether they are giving advice or providing generic information.
Prices per £100 of monthly cover varied from £5.95 to as much as £30.99 a month.
Simon Burgess, managing director of British Insurance, said: "Policies obviously vary in their scope of cover, but don't try telling me that they do so by amounts that necessitate such huge price differentials. There is blatant profiteering taking place.
"I have met with the Office of Fair Trading (OFT) to provide background information on the payment protection market in conjunction with the Super Complaint recently made by Citizens Advice. The OFT has specifically asked to see the results of this survey."
