View more on these topics

Lenders in mis-selling row

Halifax, Barclays and other major lenders have been accused of mis-selling critical illness cover by Channel Four following its investigation resulting in a programme entitled 30 minutes: How good is your insurance?

The programme, aired on June 5, reinforces recent claims by the Consumers&#39 Association that only 5% of advisers recommended an insurance product, with a mortgage, that suited their clients&#39 needs.

For the C4 exposé, a journalist posing as a first-time buyer went to a number of banks and building societies for a mortgage. Despite stating they had no dependants, no spare cash and not asking for insurance, advisers repeatedly urged them to take critical illness cover.

At Abbey, an adviser used a scare story of a 47 year old man who had suffered a heart attack and lost his home to encourage the customer to buy the insurance.

A Halifax adviser warned that “one in three people get cancer” as a means of getting them to take up the cover, despite the fact many cancers are not covered by critical illness insurance.

And one Barclays adviser pushed the cover despite being told that the customer was not sure they could afford it.

All the companies involved say they are shocked at the findings, with Halifax stating it will “not tolerate the mis-selling of any product”.

However, Roy McLoughlin, senior partner at Master Adviser, says: “A lot of people come to us having taken out a mortgage where critical illness has been included in the package without the customer really knowing what they&#39ve been sold. And there are different definitions – does it cover heart surgery or do you have to be hit by a lorry?”

Recommended

Brown has failed on fairer tax system, says Cable

Vince Cable MP, Liberal Democrat shadow chancellor, has criticised Gordon Brown&#39s performance as chancellor. Cable says: “The chancellor has failed to make the tax system fairer and to tackle the risks posed by the house price boom. Gordon Brown&#39s greatest single achievement has been copying a policy by the Liberal Democrats – independence for the […]

Steely MPC cools long-term swap rates

Short-term swap rates have gone up but long-term ones have actually come down, presumably as a result of the Monetary Policy Committee&#39s willingness to increase base rates, as demonstrated last Thursday. • One-year money is up 0.05% to 5.31%• Two-year money is up 0.02% to 5.47%• Three-year money is unchanged at 5.55%• Five-year money is […]

Vesta Money picks SDS MAPS for mortgage processing

SDS Applications, a provider of web-enabled solutions and software for the mortgage industry, has announced that Vesta Money has selected SDS MAPS for its mortgage processing. Vesta operates nationwide and says it generates and packages millions of pounds in mortgages per year. Vesta will deploy MAPS throughout the company&#39s operation The system will be used […]

Fear of fines will spur uptake of call recording

Fear of fines from the Financial Services Authority post-Mortgage Day will spur a huge take-up in call recording technology among brokers, claims software firm Veritape. With its PC-based phone call recording system, CallCentre, the firm is expecting the majority of its business to come from mortgage and general insurance brokers. MCOB rules require firms to […]

Newsletter

News and expert analysis straight to your inbox

Sign up