Direct debit costing insurance customers millions
March 9, 2007 by admin
Filed under News, News-Insurance
Millions of people are paying too much for their contents insurance because they are being charged for paying by direct debit.
New research from Abbey shows that 9.3 million of us are being forced to pay a combined total of £290 million in direct debit charges.
The firm found that of the 215 policies which are on the market, 44 per cent charge interest to customers who use direct debit.
It has been calculated that the average person is paying £31 a year more for the privilege, with some being forced to pay £55 a year.
Of greatest concern for Abbey is that many people may be completely unaware of the interest being charged, leading to a false sense of satisfaction with a provider.
“Using direct debit to buy home insurance is not a service you should be paying for,” said Prasad Shastri, head of insurance marketing at Abbey.
“There is no point using a competitively priced insurer if they then go and add to your annual bill using back-door methods.
“Customers should carefully look to avoid insurers that levy an additional fee for paying premiums over the course of the year,” he added.
If you are considering taking out any type of insurance check to see if a charge is levied for paying by direct debit and calculate if it is worth your while switching provider.
