Financial Misselling Throughout The Years

HIGH RISK BONDS:Otherwise known as 'Precipice' Bonds or 'high income' bonds which originally surfaced around 2000. Lloyds TSB again faced a substantial compensation bill of £98 million, 44% of the policies sold being unsuitable for those individuals. The FSA also fined Lloyds TSB £1.9 million in 2003. The product was designed by the Scottish Widows Group who were acquired by Lloyds TSB in March 2000. In total, 51,00 policies were sold. In 2004 the FSA also fined Capita Trust (formerly Royal & Sun Alliance Trust Company Ltd) £300,000 and compensation to customers was put at around £3.5million. The marketing of precipice bonds potentially placed a significant number of customers at risk of loss. Higher risk complex products should be promoted with care. Reasonable steps to ensure consumers understood the nature of the risks involved in precipice bonds were not taken.

ENDOWMENTS:Perhaps along with pensions the most widely recognised of mis-selling issues. Once again Lloyds TSB was fined a record £1million in December 2002 by the FSA with the bank setting aside £165 million to compensate between 42,000 and 46,000 policy holders (averaging £4000 per policyholder). The mis-sold endowment mortgages occurred between 1995 and 1999. As well as the Abbey Life arm of Lloyds TSB also involved were other providers identified by the FSA such as Royal London Group, Royal Scottish Assurance (part of RBS), Scottish Amicable, Royal and Sun Alliance and Winterhur. An estimated 430,000 home buyers were in receipt of a total of £1bn in compensation. In June 2005, the Financial Ombudsman Service (FOS) revealed it was receiving 1,300 endowment mis-selling claims a week. Widespread unsuitable recommendations of mortgage endowments were made to unsuspecting consumers, again this advice being driven by large commissions.

MORTGAGE MIS SELLING:The most recent case of mis-selling concerns a precedent involving mortgage mis-selling. The issue concerned a housing association tenant, who had suffered the Trauma of repossession. A valuable promise of a rent fixed for life was in place. However, a mortgage adviser persuaded him to buy the property and failed to consider the consequences when the discounted mortgage rate ended. albeit recent, could well be the tip of a very large iceberg. The associated facets of regulated mortgages will no doubt prompt a flurry of activity within self certification and the more vulnerable borrowers. Council right to buy tenants have always been heavily canvassed. The Mortgage Code of Business along with The Financial Services act is there to protect consumers.

CREDIT CARD CHARGES:In 2006 The Office of Fair Trading advised that credit card default charges were unfair and that these charges had generally been set at a significantly higher level than is legally fair. These charges had netted in excess of £300 million a year. Where credit card default charges are set at more than £12, the OFT will presume that they are unfair. A default charge is not fair simply because it is below £12. A default charge should only be used to recover certain limited administrative costs. Card issuers were required to confirm their response to the OFT statement by 31 May 2006 in response to fair and appropriate charge. A fair default charge should not exceed a reasonable estimate of certain limited administrative costs which the credit card issuer reasonably expects to incur as a result of default.

Things that one should know about life insurance

Well, there is hardly a person who does not need a life insurance. Basically, a life insurance is a policy that covers different areas of your life and pay money on a regular basis under some specific circumstances. The life insurance gives you a peace of mind and thus helps you function better.

There are different walks of life that a life insurance can cover. It can cover the mortgage that you have. If you have such a life insurance policy you will get a good amount of money to pay off the mortgage if you fall ill. In case you die, your family will get the money to get rid off the loan.

Similarly, there is the Level Term Assurance. In this type of insurance policy, you have to decide the span of the policy and the amount you want. This will provide money if you within the span of the policy.

The basic aim of a life insurance is to provide financial support to you and your family in case something happens to you. Certainly it does not encourage some ominous events to take place; rather it guards you against it.

In UK there are thousands of Life insurance companies like the Virgin Money life insurance, Liverpool Victoria life insurance and plenty of others. Each of them have their own advantages and draw backs. However, before going for a specific agency, it would be better to learn about the basic concepts of life insurance first.

As you can see, a life insurance has the ability to give your family an economic protection when you are unable to provide it. So, it is important to learn about it in details.

If you belong to the age group of 18 to 69, you are eligible for a life insurance in the UK and it is better that you do it. There is nothing negative in it. Rather it gives you a peace of mind that eventually helps you to perform better. As far as the length of the life insurance is concerned you should keep in mind certain key dates of your life. this can be the date of your retirement, the date of paying off the mortgage and things like that. If you think that you need two insurances, it is better to go for two separate policies. For, in it, you have to pay almost the same amount of money. But the cover that you get in return two times than the joint policy. It is even more useful in case you or your partner has some illness. In that case the cost of the partner may be lost for the cover.

There are different factors that decided over the level of coverage. It depends on the financial dependence of the other members of the family on you. Whether there is any mortgage and what is the situation of the credit there and the age of the children and how long they will take to grow self dependant and other things.

If you are confused visit the website of UK Life Insurance. They will give you all the necessary information on the different leading service providers like AIG Direct life insurance, Direct Line life insurance and plenty of others.