Over 30 per cent of homeowners say they felt pressured into buying associated insurance products when taking out a new mortgage within the last year.
As the PPI industry is worth an estimated £5.5bn a year, some financial services companies are anxious to ensure that they maximise sales. The FSA has announced a fine for a card provider over Payment Protection Insurance. PPI is an insurance that covers individuals in case they cannot meet payments as a result of illness or unemployment.
A two-year research project by Capital Blue surveyed over 15,000 people who had recently completed mortgages (7,800 within the last year) and asked if they felt pushed into purchasing ancillary products with their mortgage including life assurance, buildings, contents redundancy and PPI insurance.
Of those surveyed, 11 per cent did feel pressurised to buy PPI, whilst another 13 per cent were steered towards contents insurance and 17 per cent felt pushed to take out buildings insurance.
A total 31 per cent of respondents felt they were pushed into purchasing ancillary products – an increase from 28 per cent in 2006.
These results indicate that either the customer is not convinced they need the product in the first place, they can’t afford the product or, more worryingly, that the adviser’s motives are not focussed on customer needs.
The lenders and product providers who were deemed to be the least pushy were One Account Ltd (The)
Bank of Ireland Home Mortgages, Mortgage Express Ltd, Portman Building Society, and Woolwich.
