'Personal pricing' adds to confusion over rates for 'offline' borrowers

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The Independent Online

A growing number of high-street banks are hiding behind a "personal pricing smokescreen" when offering loans to offline applicants, according to uSwitch.com.

The price-comparison service is warning that there are already "huge variations" in the loan rates available to consumers online and offline, and that personal pricing is adding to the confusion.

Its figures show that following the Bank of England's quarter-point rise in the base rate in July, offline loans – those available in branches or over the phone – have gone up by one percentage point; over the same period, online rates have increased by just 0.2 percentage points.

Across all providers, the average annual percentage rate (APR) for an online loan is currently 7.7 per cent, compared to 8.7 per cent for the average offline loan.

But further to this, more providers are now operating a personal pricing policy where rates are not advertised, which means customers going into a branch cannot expect to see a "typical APR."

Instead, they are given a "personal" rate.

This, according to uSwitch, means it is hard for people to compare products. It is also makes this area a hard one to regulate.

"It a minefield for consumers seeking to shop around and get the best deal," said Mike Naylor at uSwitch.

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