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  • FIRST POST
    • Former MSE Paloma
    • By Former MSE Paloma 11th May 15, 11:11 AM
    • 526Posts
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    Former MSE Paloma
    MSE News: Insurers failing to give clear information on payment options
    • #1
    • 11th May 15, 11:11 AM
    MSE News: Insurers failing to give clear information on payment options 11th May 15 at 11:11 AM
    People buying home and car insurance online are not given clear information about payment options, the FCA says ...

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    Insurers failing to give clear information on payment options




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Page 1
    • gadgetmind
    • By gadgetmind 11th May 15, 12:51 PM
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    gadgetmind
    • #2
    • 11th May 15, 12:51 PM
    • #2
    • 11th May 15, 12:51 PM
    So consumers are now incapable of multiply by 12 and doing a subtract? Sheesh!
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • Consumerist
    • By Consumerist 11th May 15, 2:48 PM
    • 5,300 Posts
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    Consumerist
    • #3
    • 11th May 15, 2:48 PM
    • #3
    • 11th May 15, 2:48 PM
    So consumers are now incapable of multiply by 12 and doing a subtract? Sheesh!
    Originally posted by gadgetmind
    No.

    But most are not capable of turning that simplistic scrap of arithmetic into an APR.

    I don't quite understand the mindset of the financial anoraks on here who always seem to be against the provision of further information for consumers. Banks and credit-card providers have been giving this kind of information for years so what's so special about the insurance companies that they need not?
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • gadgetmind
    • By gadgetmind 11th May 15, 3:03 PM
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    gadgetmind
    • #4
    • 11th May 15, 3:03 PM
    • #4
    • 11th May 15, 3:03 PM
    One more divide and the APR is staring you in the face but I'd expect many people just want to know how much extra it will cost them to pay by instalments.

    Don't get me wrong, I can't see why insurers shouldn't give this figure, but equally well it's not something to get excited about.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • Consumerist
    • By Consumerist 11th May 15, 3:49 PM
    • 5,300 Posts
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    Consumerist
    • #5
    • 11th May 15, 3:49 PM
    • #5
    • 11th May 15, 3:49 PM
    I regret that it is not as simple as you make out. Even with a spreadsheet, finding an APR is a recursive calculation. You could use APR tables but how many people have even heard of such things?

    I do, however, take your point that many people don't even understand the significance of an APR.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • Caddyman
    • By Caddyman 11th May 15, 4:41 PM
    • 341 Posts
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    Caddyman
    • #6
    • 11th May 15, 4:41 PM
    • #6
    • 11th May 15, 4:41 PM
    The only thing I'm ever interested in when I renew my insurances, is to make sure I'm not being deceived into committing myself to a Continuous Payment Authority, which I firmly believe should be made illegal, and making sure I don't get deceived into ticking boxes which would involve getting junk mail.

    I guess I'm lucky, I always pay the whole year up in one go on my policies thus avoiding the ridiculous interest payments paying monthly.
    • minislim
    • By minislim 11th May 15, 4:53 PM
    • 345 Posts
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    minislim
    • #7
    • 11th May 15, 4:53 PM
    • #7
    • 11th May 15, 4:53 PM
    its only been around since 2000 when i did my first online quote.

    why has it only taken 15 years for this to be realised by everyone else?

    it was however refreshing to see the postoffice home insurance have scrapped apr on monthly payments when i was pricing up last month.

    and it was the second cheapest too!
    • Consumerist
    • By Consumerist 11th May 15, 5:20 PM
    • 5,300 Posts
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    Consumerist
    • #8
    • 11th May 15, 5:20 PM
    • #8
    • 11th May 15, 5:20 PM
    . . . it was however refreshing to see the postoffice home insurance have scrapped apr on monthly payments when i was pricing up last month.
    Originally posted by minislim
    Not quite sure what that means.

    Have they scrapped charging interest on monthly payments (i.e. same annual subscription whether by monthly or annual payments) or have they just stopped declaring the APR? - the latter is exactly what the FCA is complaining about.
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • chanz4
    • By chanz4 11th May 15, 7:15 PM
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    chanz4
    • #9
    • 11th May 15, 7:15 PM
    • #9
    • 11th May 15, 7:15 PM
    Can you confirm on money supermarket are they in the clear
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
    • rs65
    • By rs65 11th May 15, 7:20 PM
    • 5,377 Posts
    • 2,566 Thanks
    rs65
    I don't quite understand the mindset of the financial anoraks on here who always seem to be against the provision of further information for consumers. Banks and credit-card providers have been giving this kind of information for years so what's so special about the insurance companies that they need not?
    Originally posted by Consumerist
    Most consumers don't need to know anything other than what the monthly cost will be.
    • gadgetmind
    • By gadgetmind 11th May 15, 7:26 PM
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    gadgetmind
    Most consumers don't need to know anything other than what the monthly cost will be.
    Originally posted by rs65
    Really? Their monthly cost will be less if the pay up front, so it's not that simple.

    I've run the sums for every insurance renewal (and TV license BTW) and have always decided to make a one off payment.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • rs65
    • By rs65 11th May 15, 7:37 PM
    • 5,377 Posts
    • 2,566 Thanks
    rs65
    I've run the sums for every insurance renewal (and TV license BTW) and have always decided to make a one off payment.
    Originally posted by gadgetmind
    Same here - unless its interest free. I suspect the majority pay monthly but I've never seen stats on this.
    • gadgetmind
    • By gadgetmind 11th May 15, 7:44 PM
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    gadgetmind
    Interest free aka "you're paying interest but we're hiding it".

    Insurance margins are wafer thin so most of their profit comes from getting up front payments but on any claims being further down the line.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • Consumerist
    • By Consumerist 11th May 15, 8:40 PM
    • 5,300 Posts
    • 2,647 Thanks
    Consumerist
    Interest free aka "you're paying interest but we're hiding it". . .
    Originally posted by gadgetmind
    Agreed. See also "0% finance".
    Warning: In the kingdom of the blind, the one-eyed man is king.
    • Pincher
    • By Pincher 11th May 15, 9:17 PM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    The important part is that you cannot cancel the policy part way and get a refund.


    If you pay in one lump sum in the beginning, no credit agreement has been drawn up, and the insurer can give you a pro rata refund, less some admin fee.


    Idiots want the monthly option, thinking that they can sell the car in say month 9, then cancel the direct debit, and walk away from paying any more.


    What happens is the premium was £500, but a middleman signs a loan agreement for £600 with the policy holder. The insurer gets £500, just like a single lump sum premium. You have an obligation to pay £50 a month for 12 months to a loan company, and the loan agreement has nothing to do with your insurance. The insurance company may be willing to give you a partial refund on the £500, but you have to complete the 12 payments any way.


    If you want to spread the payment, you can get a 0% purchase credit card, pay the £500 premium, then pay off the balance over whatever the credit card deal is.
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