31 October 2005
Banks' personal loan insurance charges have been criticised in a broadside by the British Insurance Brokers' Association (Biba).
The association's research has found that banks are charging customers four times as much for insurance cover on loans and credit cards than specialist brokers typically ask, and has urged people to shop around for better deals than can be found on the high street.
Payment protection insurance, Biba says, can cost up to 340 per cent more from a high street lender than from an independent specialist broker such as Burgess.
Biba is urging its independent members to enter the market in force and make help consumers realise that there are far cheaper deals available to them. An online trading programme with the Chartered Insurance Institute (CII) is being launched to help this process.
According to the Telegraph, Eric Galbraith - chief executive of Biba - said: "It is outrageous that customers can be charged four times as much for insurance if they do not shop around.
"People often assume, when they take out a loan, they can trust the provider of that loan to give them value for money. But this is often not the case."
The business of personal loan insurance was the subject of a "super complaint" from the Citizens Advice Bureau to the Office of Fair Trading last month, claiming that services provided were often mis-sold and over-priced.
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