The FCA has announced it’s looking into premium finance – the unjust ‘tax on being poor’ for those who can’t pay for their insurance upfront each year and are charged excessive monthly rates of interest as a result.
“This is a positive step, but it must lead to real action and consequences for insurers who are ripping us off,” said a Which? spokesman after the consumer body has been campaigning for an investigation into staged payments.
“We’re also calling on the FCA to get tough with insurers that fail to offer fair-value quotes or make the claims handling process a nightmare for their customers.”
It comes after the announcement of a task force to investigate premiums.
IAM RoadSmart Director of Policy and Standards Nicholas Lyes said, “Establishing a taskforce is a welcome step from Ministers and one that we hope will have a positive impact on bringing down high motor insurance premiums.
“We remain concerned that recent increases in premiums have had a disproportionate impact on younger drivers. Our research shows that between 2022 and 2023, the number of drivers aged 17-20 with insurance offences added to their licence increased by a quarter, meaning that eyewatering premiums may be tempting some to avoid taking it out in the first place.
“We support measures that encourage incentives such as lower premiums for those younger drivers taking additional training and this option should be considered as part of the solution.”