Consumers need to take responsibility for their finances
- 28TH MAY 2007
While the press is rife with stories of mis-sold payment protection insurance policies where customers have often been coerced into buying unsuitable and over priced policies, there is one man who believes that it is the consumers’ responsibility that they understand the terms and value of financial products.
Stephen Rose, from the Debt Advice Bureau, said that it was the customers’ decision as to how much money they needed to borrow and the affordability of it to stop them getting into financial trouble.
It was their "ultimate responsibility” he commented. He also said that the information about repayments on financial products such as loans, credit cards and payment protection insurance was often clearly spelt out and that that it was the consumer who failed to read the document carefully.
In his controversial speech, Mr Rose said that there’s "an issue of financial awareness and financial responsibility on the part of borrowers, so that they're fully conversant before they sign with what is involved and what it entails".
Speaking about payment protection insurance in particular, he did concede that this was an area where the product’s reputation had been tarnished as a result of a lack of consumer knowledge.
"Obviously that's a prime example of how people were unaware of how it actually worked and what they were paying for, particularly on unsecured loans."
In response to these comments, Simon Burgess form independent payment protection insurance providers British Insurance said that he felt that the understanding if financial products was the key responsibility of the provider. “They should be the ones ensuring that their customers are fully informed of what the product entails and what they are paying out for.”
The Financial Services Authority has recently launched a £2m campaign in a bid to educate consumers about payment protection insurance.
