Sneaky tactics used by airlines , banks and insurance companies to trick millions of customers into buying extra insurance could soon be outlawed . The City watchdog has said it wants to ban companies from ‘ opt out ’ selling – where customers have to untick a box in the small print if they want to avoid buying an add-on insurance policy . In a damning report , the Financial Conduct Authority said many customers are being tricked into buying products they do not want or need . The Financial Conduct Authority said many customers are being tricked into buying products they do not want or need . Those that fall into the trap - whether they are buying a concert ticket or paying for car insurance - are more likely to buy inappropriate products , or receive poor value for money . The FCA estimates the scam is costing customers more than £108 million a year in overpayments . The market for such products - including identity theft protection , home insurance and breakdown cover – is worth an estimated £1billion a year to the insurance industry . They are typically sold alongside insurance such as travel , car and home cover . But just under a fifth of customers are not even aware they have them , according to the FCA . The sale of add-on products has already given rise to the payment protection insurance mis-selling scandal , where millions of customers were sold policies they did not want or need alongside loans or credit cards . High street banks and other lenders have paid out £18billion in compensation so far – making it the most expensive mis-selling scandal in UK history . The sneaky tactics are used by airlines and banks with products - including identity theft protection , home insurance and breakdown cover - typically sold alongside travel and car insurance and home cover . Christopher Woolard , director of strategy and competition at the FCA said : ‘ This is about ensuring consumers can make the right decision on what add-on insurance they do or don ’ t need . Forgetting to untick a box at the end of a purchase is not making an informed choice. ’ Similar tactics are used by firms to barrage customers with junk mail and marketing . The ban would apply to add-on sales of all products alongside financial primary policies - meaning the insurance policy or loan that the customer intended to buy in the first place . Paying out : The FCA estimates the scam is costing customers more than £108 million a year in overpayments . Key examples include key cover sold alongside motor insurance , or protection cover when taking out a mortgage or credit card . The City watchdog also wants firms to inform customers about add-on policies earlier in the sales process – rather than just before they make the purchase - so they can make an informed choice and shop around . Existing rules are already meant to protect customers who are buying an add-on financial policy alongside a non financial product such as a plane ticket . The sale of insurance add-ons is hugely lucrative , with insurance companies making bumper profits . According to a separate study by the Competition and Markets Authority just 5pc of premiums collected from customers who take out personal injury insurance alongside motor insurance is paid out in claims . Hugh Savill , director of regulation at industry lobby group the Association of British Insurers said it supported the proposed ban . It said : ‘ Although the use of pre-ticked boxes is not widespread , these proposals will encourage all firms to make sure their customers are provided with appropriate information at an early stage. ’ The FCA said it will consult with consumer groups and financial companies on the proposed changes until June 25 .
FCA says customers tricked into buying products they do not want or need . Comment: They are typically sold alongside travel and car insurance and home cover .