Which? says mortgage advisers cannot be trusted on insurance

Which? has revealed today that only one of the 39 financial advisers it tested sold correct mortgage insurance cover.

17:19 03 June 2004

Which? has revealed today that only one of the 39 financial advisers it tested sold correct mortgage insurance cover.

The Consumers' Association magazine pointed out that companies make a lot of money from selling protection against death and critical illness, but added that too many advisers cannot be trusted to make sure people will be covered if they are unable to work.

"Our investigation exposes serious problems with the way advisers work," said Malcolm Coles, editor of Which?

The association's investigation revealed "cynical shock tactics" employed by certain advisers from major high-street firms.

One advisor told an undercover investigator that his cousin had recently been diagnosed with breast cancer, another said he was attending a funeral later that day for a 42-year-old who had died of leukaemia.

"It's appalling to use scare tactics that could dupe people into spending hundreds of pounds each year on cover they don't need," said Mr Coles.

Of the 39 advisers visited , 23 recommended life insurance that was not needed, just three of the 25 that recommended critical illness insurance explained what was and what was not covered by it, and only 11 of the 30 advisers who recommended cover worked out what the 'client' could afford.

There are new rules coming in from the Financial Services Authority regulating this advice from next January , but Which? says there is a long way to go.

"We're glad a tightening up of selling practices is on the horizon, but we're not convinced it'll be enough," said Mr Coles.

"We think the FSA needs to do its own mystery shopping, and fine any company that breaks the rules," the Which? editor added.