Get out of jail free
NICHE MORTGAGES – AUGUST 2007 - 1ST AUGUST 2007
So Paris Hilton is out of jail after 23 days having yo-yoed between her home and her cell over the last few weeks.
For many, her recent arrest was slow in coming after numerous indiscretions behind the wheel. Banned from driving for being over the limit, she was then caught at the wheel of a car while still suspended. Thereafter she was caught driving again while still suspended and only then was a custodial sentence handed down.
This soon turned to farce as she was released after three days on medical grounds to serve the rest of her sentence under house arrest. However this ruling was quickly overturned. Hilton was back in jail and after time off for good behaviour she has now duly been released.
One wonders how many others would have been granted a stay of execution after being caught driving while suspended and how many prisoners get released to serve their sentence in the comfort of their own home, even if the decision was quickly rescinded.
The point is that personal wealth and power can buy advantages, which others simply do not enjoy, even if they are not enough to ultimately get people completely off the hook.
This is exactly the scenario we are seeing in the protection insurance market where high street providers take advantage of their position at the point of sale and use it to sell over-priced policies to their clients.
At the moment they are getting away with it and the only hope is that their actions will soon catch up with them and a higher power will pull them in to line.
High street mortgage payment protection insurance providers are allowed to sell policies to clients that are almost three times more expensive than others, and yet no regulator or legislator has done anything to stop firms from abusing their power in this way.
Major financial institutions sell loan protection at 12 times the cost of more competitively priced products and again regulators seem happy to let them take advantage of their positions of strength at the expense of the end customer.
It may have taken a while and been somewhat convoluted, but eventually justice was served on Miss Hilton.
Hopefully the authorities will be swifter and faster to act in the case of the powerful high street protection providers, who are currently making a mockery of the rules that are in place.
The ball currently lies in the Competition Commission’s court and it must not hold back when it comes to making the marketplace a fairer one for consumers to shop in.
If, as the FSA states, consumers are to be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture, it must also examine the huge divergence in price for everyday protection products and set about closing the gap. It’s time to level the playing field.
Simon Burgess
Managing director
Britishinsurance.com
