Insurance broker credit check ....... why ?

Insurance broker credit check ....... why ?

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Discussion

Nigel Worc's

Original Poster:

8,121 posts

187 months

Thursday 29th March 2012
quotequote all
Hello all.

A chap on a beemer forum I use has asked the following, anyone know why this should be, are they telling the truth etc ?

I have just been informed by my broker (Footman James / Aon) that in order for them to give me a quote, I must agree to the insurance company doing a credit check on me.
Just for a quote! I always pay for my insurance in one lump prior to the policy being issued or renewed, so why do they need a credit check. The broker says that if I do not agree to this, then they will not be able to give me the best quote, or in some cases none at all.
Have we any insurance experts in the comunity who can give an explanation for this.
I have never had any problem with credit, as I usually deal in cash or use my credit card, and that is paid off by direct debit on a monthly basis, so a credit check does not worry me, but it is costing the insurance companies, so the premium will go up. Its also a matter of principal.


Thread here : http://www.bavarian-board.co.uk/forum_posts.asp?TI...

Puddenchucker

4,036 posts

217 months

Thursday 29th March 2012
quotequote all
I know that some insurance co's check your credit file if you do an online quote (including if via Go Confused Meerkat). I believe it's as much for an identity check as anything.

2 sMoKiN bArReLs

30,230 posts

234 months

Thursday 29th March 2012
quotequote all
On line comparison sites do this without asking first!

TVR1

5,460 posts

224 months

Thursday 29th March 2012
quotequote all
As a previous poster mentioned, it is an ID verification check. It is recorded as such on your credit file for you to see but is not recorded as an enquiry in relation to your financial position. No other lender or anyone you apply for credit from can see the enquiry. A non event but it does get people worried in case of multiple searches causing damage. No probs at all.

Nigel Worc's

Original Poster:

8,121 posts

187 months

Thursday 29th March 2012
quotequote all
TVR1 said:
As a previous poster mentioned, it is an ID verification check. It is recorded as such on your credit file for you to see but is not recorded as an enquiry in relation to your financial position. No other lender or anyone you apply for credit from can see the enquiry. A non event but it does get people worried in case of multiple searches causing damage. No probs at all.
Many thanks, I've put a link to this thread on the beemer forum for him, but I'll copy and paste your answer too, he's a lovely old chap.

Noger

7,117 posts

248 months

Thursday 29th March 2012
quotequote all
Probably "Know Your Customer" checks.

I don't know any insurer who credit checks at quote.

TwigtheWonderkid

43,248 posts

149 months

Thursday 29th March 2012
quotequote all
Noger said:
Probably "Know Your Customer" checks.

I don't know any insurer who credit checks at quote.
Aviva. Only after a credit check will they offer you their "enhanced" price. No credit check, crap quote.

Higgs boson

1,091 posts

152 months

Friday 30th March 2012
quotequote all
Same thing happened to OH this year (after being with the same insurer for several years). Upon seeing the renewal, I 'phoned and said that I could get a much better price online. "Just a minute, sir. If we can do a credit check, then we can offer you a far better deal".
And they did beat the online quote, too.

roachcoach

3,975 posts

154 months

Friday 30th March 2012
quotequote all
Not to sound all tinfoil-hattyy™ but are there not trends of bad credit rating=more likely to claim?

Could be a stepping stone to something else perhaps? Particularly since the new EU rules remove a swathe of metrics from them.

It happens in the USA I'm fairly certain, unless it is actually illegal here, I'd say it is only a matter of time.

Noger

7,117 posts

248 months

Saturday 31st March 2012
quotequote all
TwigtheWonderkid said:
Noger said:
Probably "Know Your Customer" checks.

I don't know any insurer who credit checks at quote.
Aviva. Only after a credit check will they offer you their "enhanced" price. No credit check, crap quote.
They should only being doing a light touch check, not the full one.

Maybe things have changed, but we were told a couple of years ago (by the FSA) that pricing on credit checks was a no go. What we end up doing is pushing up the APR instead.

mybrainhurts

90,809 posts

254 months

Saturday 31st March 2012
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I had this years ago when hiring a van.

Seti

1,921 posts

203 months

Saturday 31st March 2012
quotequote all
Money laundering regs in line with know your client I expect.

mybrainhurts

90,809 posts

254 months

Saturday 31st March 2012
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Why can't they use the Electoral Register for ID checks?

2 sMoKiN bArReLs

30,230 posts

234 months

Saturday 31st March 2012
quotequote all
mybrainhurts said:
Why can't they use the Electoral Register for ID checks?
Because the Experian thing has this, plus other blurb.

2 sMoKiN bArReLs

30,230 posts

234 months

Saturday 31st March 2012
quotequote all
...bugger, posted a serious response

rallycross

12,746 posts

236 months

Saturday 31st March 2012
quotequote all
2 sMoKiN bArReLs said:
Because the Experian thing has this, plus other blurb.
Not just Experian its Experian, Equifax and Callcredit.

Mojooo

12,668 posts

179 months

Saturday 31st March 2012
quotequote all
mybrainhurts said:
Why can't they use the Electoral Register for ID checks?
The electoral regster is not that accurate. If you last registered 10 years ago then it may not be up to date. if however you have taken out a credit card in the last year the credit card then experian will show that.

CatJ

9,586 posts

242 months

Saturday 31st March 2012
quotequote all
A fair few years ago, I recall seeing on my credit file Admiral appear, but there was a note to say it was for identity purposes.

Migsy

531 posts

236 months

Saturday 31st March 2012
quotequote all
Liverpool & Victoria, Royal Sun Alliance, AA and a couple of others I've forgotten show up on my credit file...all from using one of the compare type sites. They are just down as Quotes, so won't affect credit applications or be seen by lenders, but stay on your credit file for 1 year before dropping off.

mybrainhurts

90,809 posts

254 months

Saturday 31st March 2012
quotequote all
Mojooo said:
mybrainhurts said:
Why can't they use the Electoral Register for ID checks?
The electoral regster is not that accurate. If you last registered 10 years ago then it may not be up to date. if however you have taken out a credit card in the last year the credit card then experian will show that.
It's an offence to fail to register.

I'm leaning more towards the idea that they're going to discriminate against bad credit records because they deem the risk of fraud to be higher.

If so, are they acting lawfully?