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The six financial products you can live without

Rolled up £20 note in plughole

We recently investigated six financial products we believe you can do without. We think each one represents poor value for money – and often there are cheaper, better alternatives. Do you have any to add?

The six products we analysed were mobile phone insurance, card protection, packaged current accounts, structured deposits, over-50s plans, and debt management companies.

Over this week, we’ve been explaining in detail exactly why we believe each of these products should be avoided. But for me, debt management companies are the worst. These firms specifically target people who, by the nature of the services they require, are already in serious financial trouble.

The companies then levy significant fees to help get your debts into a manageable state. But in fact, you can find the same help and advice elsewhere – for free. Charitable and government organisations (including the Consumer Credit Counselling Service and National Debtline) specialise in providing free, impartial advice for those in debt.

In other words, I don’t think there’s ever a need to use a commercial debt management company. People do so because they’re desperate, they’ve seen the ads the companies run, and they don’t realise there are free alternatives. I really wonder how the people who run these firms can sleep at night!

Your experiences of poor financial products

Our investigation into poor financial products kicked off our wider, Watchdog not Lapdog campaign. We want the new financial regulator to be responsible for putting a stop to poor-quality financial products like these, and it needs to be held to account and encouraged to be more proactive.

There are so many more poor financial products and unfair financial practices which are legal, but are arguably not ethically sound. And we’d like to find out which ones really get your goat. Then we can chase up your concerns, and see what, if anything, the regulator needs to do to address them.

Do you feel you’ve been the victim of a legal ‘rip-off’? Has a bank or other financial provider sold you a duff product? Please let us know.


Not sure if this might be slightly off topic but, since retiring I have become somewhat familiar with the sort of advertising we get on daytime TV. There are three types of advert which really raise my blood pressure. 1) Accident Compensation, Compensation, Compensation! 2) PPI Claimback – I simply wrote to my lender and said I thought I might be eligible. Within 6 weeks a rather welcome cheque appeared on my doormat. Why would I employ a company (which, presumably, would take some sort of fee) just to write a letter? 3) Over 50s Plans – I’m really glad you identified this as one of the poor financial products. I’ve always wondered why anyone would pay five pounds a month into one of these products when they could pay the same amount into a savings account for, almost certainly, a better return. If anyone is that desperate that they believe they won’t have enough assets to cover the cost of their own funeral then I think they would be well advised to steer clear of these products.

I often wonder how it is that celebreties” can extoll certain financial products with out being a registered financial advisor.
I worked on the Post Office and was not allowed by law to extoll any of our savings products and I can assure you I had a very wide knowledge of them and their drawbacks.
Regarding Over 50s plans a prpaid funeral plan is a better bet. Actually if you are a Coop member and take one out with them you get the dividend on the amount paid. I was lucky with mine and got nearly 3% return in dividend

Annie says:
23 April 2012

The problem lies with the confusion between commercial debt management companies and free debt management services. Some publicity explaining the difference would help a lot of people make better choices. On the surface they can appear the same.
Someone in my circle had an excellent experience with Payplan which was introduced to her by National Debtline. Practically overnight she became a different person. Another friend had a similar problem and was talked into a Mortgage Consolidation Scheme (my personal product hate) and has nearly come to the end of his tether, paying a huge monthly mortgage payment which would not have happened under a DMP (Dept Management Plan), a free service from National Debtline.