Consumers are being urged to check that providers of their various insurance policies are based in the UK, otherwise they may be out of pocket if it comes to making a claim or a complaint.
Payment protection insurance expert Burgesses.com has warned that insurers based overseas are not subject to the strict demands of the Financial Ombudsman Service or the Financial Services Compensation Schemes (FSCS).
Mortgage and general insurance industries in the UK are required by law to meet industry standards of professionalism and competence, which includes offering access to the FSCS.
The FSCS has the power to compensate consumers in the event of the failure of any firm that is authorised, but that guarantee does not apply to customers of firms not based in the UK.
Sara-Ann Burgess, managing director of Burgesses.com, urged consumers to "do a little homework" to ensure they do not place themselves in a vulnerable position by using a non-UK regulated product provider.
© The Press Association 2008