Loans insurance being mis-sold by Finance News Bulletin
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Published: 16/02/07
expert insurance broker Burgesses has revealed that consumers are being ripped off to the tune of £1000 for every loan they takeThe extra charges come from loan defense insurance designed to protect against unemployment, disability and death that borrowers put on't actually need or can't claim forBurgesses takes a not bright view, describing such act as "profiteering" and accuses lenders of "breaching FSA [Financial Services Authority] rules"A rise in insist for borrowing, and increased competition in the individual loans market, have seen lenders turn to "bolt-on" defense insurance policies to make profits, and are said to take in £22 million a daylight hours, or £8 billion per annum, in commissions
Simon Burgess, managing manager of Burgesses, supposed: "It's not that we mind lenders making a profit - that is what they are there to do"What we object to is the profiteering of customers, who are often the most vulnerable, and selling them cover, which is all too often ineffectiveMoneyExpert Limited is authorised and regulated by the Financial armed forces Authority (FSA Registration No 301654)
The Financial armed forces Authority does not regulate some forms of mortgage
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News just in following the Northern Rock disaster, Alliance and Leicester shares took a massive dive just before the shut of trading on Monday However, with the intervention of the Chancellor, the situation appears to be under mendShares in A&L over 33 per cent down, leading many consumers concerned about the security of their savings Mortgagescouk investigates the real story, whether consumers can possibly misplace their savings, and what should be done with any money reservedAlliance and Leicester is not regarded as being as bare as Northern Rock, who took a 32 per cent plunge last Friday, but the situation is nevertheless very serious for the bank The company have similar stock and a similar-sized equilibrium sheet to Northern astound, and lost out heavily in the last half hour of trading yesterdaySo, what does this mean for customer investments Any bank that is regulated by the Financial Services power (as Alliance and Leicester and Northern Rock are) is subject to the Financial Services Compensation system This means that any investments up to £31,700 are safe, but those borrowers with more money would not be protected if the worst eventuated, and the store itself went storerupt, in theory However, the Chancellor of the Exchequer, Alistair sweetheart, has publicly stated on evidence that whatever happens to Northern Rock and A&L, customer money can be withdrawn and all deposits are safe This overrides FSCS legislation also, the BBA (British Bankers Association) have urged UK consumers to stay tranquil, and that both savers and mortgage customers have nothing to worry about In reply to the reassurance, the damaged shares in banks are beginning to climb againSo, how possible is it for a bank the size of Northern astound or A&L to go under Experts say that it would almost certainly be banned, but also advise distribution savings around more than one account The Bank of England is pledged to defend the banking system, and will move to prevent a collapse A+L may be the victim of negative conjecture, and small banks may remain in a vulnerable position Unlike Northern astound, Alliance and Leicester are yet to ask the store of England for help, and experts are comforting customers that there should be no concerns over their money Barry Summers, of Mortgagescouk, commented: "Following the coffers announcement to provide savers with a guarantee from the administration, share prices in both Northern Rock and Alliance and Leicester are now climbing again This is surely as long as peace of mind to savers However, if the worst happens and the government do have to step in the concern is how rapidly could you access funds if you require them Choosing an established institution, even as a temporary protection for some of your savings if needed at short notice, could be a secure financial decision Mortgage customers need not be concerned, as Northern Rock have affirmed that all existing offers will be honoured"A&L shares plunge, Chancellor ladder in - Mortgagescouk particular ReportNone of the information on this website is intended to promote any specific mortgage manufactured goods or provide mortgage adviceThe sphere, with image, it's reflection and Mortgagescouk are.
Read More: A&L Shares Plunge, Chancellor Steps In - Mortgages.Co.Uk Special Report >>Paymentcare launches cheap credit card insurance - Published:03/04/07
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Read More: Paymentcare Launches Cheap Credit Card Insurance >>Our £32,000 mortgage shock - Published:31/10/06
Supertanker pilot Chris Bordas and his wife, Helen, faced £32,000 of unexpected mortgage debt because of a blunder by countrywide structure SocietyThe problem arose due to quirks in the UK's biggest building civilization's computer system, which Nationwide admits could affect other customersChris, 49, and Helen, 43, from Broadstairs, Kent, have a Nationwide mortgage which is part interest-only and part repaymentThe interest-only part is left over from previous mortgages with other lenders which were backed by donation policiesWhen Chris tried to pay some of the interest-only part of his loan with an donation payout, Nationwide's system ran into problemsThe money was mistakenly removed from the repayment part of the loan, so the couple had paid almost £2,500 in additional interest on the other part by the occasion the mistake was noticedChris and Helen have a £78,000 mortgage with Nationwide; not whole of which is on a repayment basis, so the amount owed gradually reduces The other £39,000 is interest-only, so the debt must be repaid by other means, such as donation payoutsIn June 2005, one of their three donation policies matured and paid out £18,000 They took their cheque to the restricted Nationwide bough to repay some of the interest-only mortgageA few days later they inward a letter from Nationwide asking them to call and confirm that the overpayment had been the profits of a life assurance policy so that the mortgage could be 'attuned correctly''I phoned and I repeated the request that the money should be used to pay off the interest-only part of the loan,' Chris saysBut the cash was assigned wrongly, still leaving a £39,000 interest-only loan due to be paid off in seven natural life' time The couple's problem worsened in June this day when a second endowment matured, paying out £14,000 Again they tried to pay off the interest-only part of their loanThis is Money's tips and recommendation can help you get the best mortgage, find a dream house or transform your house read:Helen, a legal clerk, says she became suspicious when they realised their mortgage payments had fallen to just £150 a month Again, countrywide had paid off the wrong part of the mortgage 'If we had not noticed the mistake it would have left us an unexpected bill of £32,000 to disburse at the end of the term,' says Chriscountrywide has accepted responsibility for the errors and apologised The money has now been right deducted from the outstanding mortgage and £2,46883 recompense paid to cover all the extra interest the couple were emotional on the interest-only part of their loanA orator says: 'Nationwide receives millions of lump sum and overpayments annually, which are handled in agreement with our borrowers' instructions The automatic process allows for borrower favourite in either reducing the length of the remaining term or monthly payment'Very occasionally, where there may have been a breakdown in message, problems may arise, but these are investigated on an individual basis and the suitable action will then be taken to put right the situation We have not handled this case to our customary standards'If you have a mixed or part-and-part mortgage with Nationwide, you need to take a few simple ladder to ensure any endowment payouts are repaid correctlyThe system will automatically assign the money sum to the repayment part of your loan and decrease your monthly repayments Although this may seem attractive, it will leave you with a large outstanding debt when the mortgage has to be redeemed You require to send any cheques for overpayments with a letter explanation that you want them to be applied to the interest-only part of your loanConfirm this with the customer services team when you are sent a fake letter asking you to do so They can override the computer system and apply the overpayment to the interest-only part of your loan Finally, check your next mortgage statement to make sure the money has been deducted from the right partSelect a loan term 12 months (1 year) 24 months (2 natural life 36 months (3 natural life 48 months (4 natural life 60 months (5 natural life 72 months (6 natural life 84 months (7 natural life 96 months (8 natural life 108 months (9 natural life 120 months (10 years)Please select a type of insurance existence insurance Home and contents railway wagon Breakdown services Health - medical Health -.
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