MP urges government to ban referral fees

A Bradford MP has added to calls for the government to tackle the issue of referral fees which see insurance companies selling driver details to personal injury lawyers, which results in premiums being driven up.

David Ward, Liberal Democrat MP for Bradford East, said that he had been inundated with complaints about insurance including one 18-year-old, who has been forced to sell her car because she cannot afford cover. The lowest quote she was able to get was £6,000 and one company quoted her £53,000. The MP said he was encouraged that the Prime Minister is to look at the issue and added: “The insurance companies are both enriching themselves through these cosy arrangements and the costs are being passed on to ordinary consumers. It is an outrageous racket which has to be stopped.

The Association of British Insurers agreed that £53,000 was a ridiculous quote but said that younger drivers were being charged more because they are more likely to be involved in crashes. It has however joined calls for the banning of referral fees.