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Public unaware they lose redress rights

Nearly two-thirds of women and over half of men are unaware that they have no right of redress from the Financial Ombudsman Service on protection products that are bought direct, according to a survey by Lifesearch.

The survey finds that 62 per cent of women – the primary shopping demographic and most likely to see leaflets for directly sold protection products in supermarkets – do not know they do not have any right to ombudsman compensation if they buy an unsuitable product without getting advice. Fifty-three per cent of men are ignorant of this fact.

Eighty-four per cent of people do not trust their banks’ protection sales processes.

The survey, conducted for Lifesearch by tickbox.net, asked 1,664 people for their views on protection products and buying behaviour.

Forty-seven per cent think that life insurance is the most suitable product for them, while 23 per cent choose mortgage payment protection, 21 per cent income protection and just 11 per cent family income benefit.

Lifesearch says the figures demonstrate that consumers do not know what is the most suitable protection product for them.

Senior technical adviser Kevin Carr says: “It is not just about making the products easier to buy. People thought that endowments were a good idea, they were made easy to purchase and look what happened. Consumers may think that they know what the most appropriate products are but they do not fully understand.

“Sadly, in our industry, by the time that people are aware of any compensation, with the ombudsman, for instance, it is too late.”

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