Debt consolidation loan

said Simon Burgess, managing director of Burgesses

‘It is bad enough that these lenders are not making sure that the potential customer was aware that the initial quote included the cost of the loan protection premiums,’ said Simon Burgess, managing director of Burgesses. ‘But not to make the most cursory checks on the medical history of the applicant is irresponsible and could easily lull the applicant into a false sense of security.’

Loan protection policies provide a monthly sum sufficient to cover the monthly loan repayments if the borrower is unable to pay them because of sickness, accident or unemployment. But lenders rely on the fact that most borrowers don’t realise that loan protection cover is included in the monthly repayments when they give a quote. Many borrowers will already have income protection policies, taken out to cover their mortgage repayments and other household expenses, which would cover them anyway.

‘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 useless.’ said Burgess. ‘It brings the whole industry into disrepute and must be stopped.’

The Financial Ombudsman Service also says it is concerned about loan protection sales. On its website www.financial-ombudsman.org.uk, the Ombudsman says: 'Most borrowers are urged to protect their loans by taking out insurance to meet the repayments if they become unable to work'.

‘But the people who sell this type of insurance are often not specialists in this field and some have little or no knowledge of the policy terms. Their ‘advice’ will therefore not be of great assistance to borrowers, who may be uncertain what they are paying for and unable to judge whether it is suitable for them.’

Source : CityWire.co.uk - London,England,UK