Liverpool Victoria bank fined by the FSA

The Financial Service Authority (FSA) yesterday fined Liverpool Victoria bank £840,000 for adding protection insurance policies to customer mortgages without explaining to them that it is not compulsory.

It’s been reported that some lenders are just adding the protection policies to the quotes without a word to the customers, so they end up paying for something they did not necessary need, and in some cases when the customer realised that it was not compulsory, they would then put pressure on them to take it out still.

The FSA also said that they were also guilty of not explaining that the policy premiums were added to the customer loans up front, and failed to tell the customer that there would also be interest added to the policy.

It’s said that 14,500 clients were paying for protection policies that they didn’t fully understand due to lack of no information from the bank; each case on average was paying £1,600 for the protection policies.

The FSA said they have already fined seven other firms for misspelling policies.

It this economic climate we do not want to be paying for something we don’t need, if you use a financial adviser or when implying to a mortgage company, make sure there are no additional policies added to your loan, ask to see any insurance policies on a separate quote.

You may wish to take a payment protection out, so you should ask about this and make your decision if it affordable for you. If you get your quote separate you then can have a chance to shop around, as it can sometimes be cheaper to get cover independently from your mortgage provided

Source: Mirror

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