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ID theft insurance is pointless so stop the hard sell

Mouse trap on phone cartoon

We’ve heard from lots of you who’ve been given the hard sell when it comes to ID theft insurance – a product that we think is ultimately a waste of money. Isn’t it time insurance companies stopped the scaremongering?

Over the years at Which? we’ve come across some pretty shady examples of the tactics employed to try and flog useless products, like PPI.

But now we’ve been getting an increasing number of complaints about the way companies are trying to sell ID theft insurance. These personal stories now sit in a veritable dossier of shame to show the FSA what’s really going on.

And now, it’s been reported that CPP (a company that sells insurance) is being investigated by the Financial Services Authority (FSA) for failings in the way it’s been selling ID theft insurance.

ID theft insurance sales: your stories

We’ve been utterly shocked by what people have told us about how they’re being sold this insurance. Many say they’ve felt harassed by salespeople who won’t take no for an answer and often get rude and aggressive:

Claire told us, ‘the operator… tried to insist that I needed Fraud Protection Insurance. Her script was so aggressive that I told her she was scaremongering’.

A few people have also felt uneasy by companies using their recent experiences of fraud and burglary to sell them products.

‘I was burgled and cancelled my cards and had them re-issued. When I called my bank to get them activated, I got a huge hard-sell which they linked to my burglary. They were really pushy and I ended up having to hang up on them as they wouldn’t let it go!’, one person told us.

What’s the point of this product?

Aside from the issues around the way ID theft insurance is sold, we don’t even think it’s worth shelling out for. It’s already appeared in our top ten list of useless financial products.

In some cases, these policies include access to your credit report, along with alerts that will let you know if any information within it changes. But, the fact is, you don’t need an insurer’s help to check your credit report.

You can access your own statutory credit reports online or by post for just £2 through a credit reference agency – much cheaper than the £90 or so a year that some providers charge for ID theft insurance.

You might be offered impressive-sounding levels of cover for losses due to fraud. And although the promise of £100,000 worth of protection might seem tempting – in reality, you already have free cover under payment services regulations and the Lending Code.

Banks playing a bad part in this

We also think that banks need to rethink their part in all of this. Often, companies like CPP can only engage with consumers directly because of a number their bank’s given them. When you call up to activate your new credit card, you’ll be put through to a third party insuance provider that inevitably gives the hard sell.

Banks are knowingly acting as an ‘introducer’ to a product that’s basically unnessary and poor value. Is this really the best way to restore trust in a banking system that hasn’t exactly been the top of people’s Christmas card list lately?

Have you ever suffered the hard sell from an insurance company?

confusedsarah says:
2 April 2011

i was a victim of identity fraud. first i knew about it was i started getting bills for mobile phones and sofas!!! nobody could help me and my bank didn’t want to know. took me ages to sort out. Wish i’d had someone to help me. i think people need to know how easy it is to become a victim.

Another example of why we, the public, need strict enforcement of the law.
Why is a bank permitted to sell on our details, for which they receive a referral payment? Doesn’t this breach the data protection act?

British Telecom are the same, selling a call barring service and providing a list that you can register on to stop cold calls (which are themselves illegal) yet it is BT that are passing customer’s details on!

Too many quangos, not taking enough action. They should be enforcing the law on big businesses, then these problems wouldn’t exist. Make an example out of each bank that passes on customer data, they would soon stop.

well, if there’s money to be made…….

There should be a law restricting the sale of personal details.

The only reason they say that we “require” insurance of this nature is because they are all so good at messing it up when they are making a tidy profit from selling it in the first place. Why the **** should we have to pay for insurance against a process that infringes our rights? Surely the process should be made illegal, why are our personal details all allowed to be sold on to market research?

But insurance companies are well known for their hard sell. Look at Direct Lines “you should have landlord insurance because normal insurance doesn’t cover you if something goes wrong”!!!

Rubbish!! I am a landlord and it’s called buildings insurance, and if the building falls down or you have a break in, you claim on your buildings insurance. So Direct Line are effectively making a false claim in order to try and get more business.