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Public still confused over lack of protection redress

Sixty per cent of consumers who buy protection products without advice still believe they can seek redress from the Financial Ombudsman Service if the policy proves unsuitable.

Research commissioned by Lifesearch found that 40 per cent of these consumers were unaware that they would not be covered by the FOS while 20 per cent thought the idea they would not be covered was nonsense.

The survey included around 1,100 consumers who had bought protection products in the past year. It also found that 60 per cent of consumers said important policy details were not explained to them on websites or over the phone.

Money Marketing has been calling for warnings that non-advised sales cannot be referred to the ombudsman to be given greater prominence on policy documents so consumers can make an informed choice.

At least four out of 10 sales were found to have been non-advised although Lifesearch believes the number is probably nearer to six in 10 due to consumers not understanding the definition of advice and taking into account policies sold over the phone without advice.

Lifesearch plans to use the research in its submission to the FSA’s Icob review.

Lifesearch head of protection strategy Kevin Carr says: “This research shows most people are unaware of their options and the implications of their decisions. They are not sure whether they have been advised or not which is a concerning trend.”

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