Biba to investigate members’ claims ahead of formal complaint
Brokers have accused banks of strong-arming their customers into buying insurance products in a bid to shore-up falling profits.
Biba has received a number of complaints and is investigating. Eric Galbraith, its chief executive, said: “Brokers come under competitive pressures from all areas. Recently we have seen additional pressure from some lenders who have themselves been under pressure because of the credit crunch.
“A number of our members have, however, reported increased influence and potentially undue pressure on some clients to use the insurance services of that lender.
“We are investigating these allegations,” he said.
“There is a code of practice for lenders which states: ‘We will not insist that you buy an insurance product from us when we agree to provide a lending product’, and it is this code that will be reviewed.”
Insurance Times understands Biba is looking for more evidence before it takes any formal action, such as reporting them to the FSA. It also understands that the allegations are concentrated on only one or two lenders.
One broker said he had no first-hand evidence but had heard customers complain about hard-nosed tactics from banks.
Another well-established broker said he had also heard complaints. He believed any bank that had a surge in renewals or fresh take-up of its insurance products would come under scrutiny.
Banks have also come under fire recently for mis-selling PPI?products alongside loans.