Customers complain about 'sneaky' insurance fees

As premiums go down, other costs creep in


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Two thirds of people say that insurance and other financial services companies are bamboozling them with hidden charges.

A survey from Which? finds that almost half the population has paid a fee or charge on a financial product or service in the last year. And 68% of these say that separate fees or charges were used to trick people into thinking that the cost is lower than it is.

Six in 10 people find it difficult to compare the total cost of financial products and services, as the fees and charges vary so much - and 68% think they're deliberately made more complicated than they need to be in order to confuse customers.

"Consumers are fed up with being hit with unexpected, additional costs for financial products that lead to them paying more than they bargained for," says Which? executive director Richard Lloyd. "These fees can be hard to avoid, and people often don't know what they're really paying for."

The car insurance business is a particular offender, says Which?, with nearly half of providers having upped their administration or cancellation fees in the last three years while reducing premiums - figures from show that the average cost has fallen by 15% in the last year, to £579, and is now a third below the peak of 2011.

But while the headline figure may be lower, other charges have crept up. Endsleigh, indeed, has trebled its cancellation fee, while Churchill and Privilege have doubled theirs.

Meanwhile, Churchill, LV, More Than, Nationwide, Privilege and Saga have increased the fee they charge to make changes to a policy (such as getting married, changing job or moving home) by at least half.

And eight companies have introduced new fees and charges, with the AA and Hastings Direct charging over £20 just to set up policies and Direct Line, NatWest, Privilege and Sainsbury's now charging for duplicate documents if customers want to receive them in the post.

Which is calling on companies to display fees more clearly and make it easier to compare prices. It also wants the government and regulator to conduct a review of financial fees and charges across the board.

"We want the financial services industry to Stop Sneaky Fees and Charges, and put an end to excessive, unclear and hard to compare fees that do nothing to improve the low level of trust in these markets," says Lloyd.
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