OFT prepares for crackdown on legal expenses products

Traffic cars

The Office of Fair Trading (OFT) is preparing a crackdown on the sale of legal expenses products, sources told Insurance Times.

The OFT is concerned about a number of issues surrounding the sale of ancillary legal expenses products on motor policies.

It is understood that the OFT is concerned about the perceived high level of commissions brokers or intermediaries are taking and the level of transparency and awareness that customers have on legal expenses products sold as an ancillary to motor products.

The OFT is unlikely to refer the issue to the Competition Commission, but instead make voluntary recommendations for the industry to follow or pursue a more in-depth market study lasting up to two years.

The regulator consulted the industry about motor insurance in October and the results are expected within a fortnight.

An OFT spokesman declined to comment.