Blog: A premium finance cap might be the only end game to stop greedy profiteering
A cap on premium finance is needed to prevent overcharging, although a balance needs to be struck between offering fair value and guaranteeing a market exists to offer these products, writes Rosie Simms.
In October the Financial Conduct Authority launched a review, known as a competition market study, to see whether people who borrow to pay for motor and home insurance are receiving fair, competitive deals.
The regulator said it was conducting the review because premium finance is “an important product for many customers” but that it had been concerned about it “for some time”, adding it “may not represent fair value for some customers and that competition may not be functioning effectively”.
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