Money Grouse: A direct line to knowledge

Simon Reynolds, who works for the Independent, was disturbed when he received an offer of a personal loan from his motor insurers, Direct Line.

The direct insurer, a subsidiary of Royal Bank of Scotland, is moving into the personal loans field by offering loans to its own customers.

'Their so-called 'personal illustration' was very personal. It compared the Direct Line rate to four other personal loans - offered by the four financial institutions where I'm a customer,' Mr Reynolds said.

A Direct Line spokeswoman said a selection from the main banks and building societies was used for the illustrations.

'It's entirely a coincidence,' she said. She dismissed suggestions that Direct Line had done any searching to make the illustration as personal as possible.

The four loans in Mr Reynolds's illustration, dated October but sent out this week, were NatWest, Halifax, Bank of Scotland and Leeds Permanent Building Society.

Direct Line charges 16 per cent APR for a pounds 7,500 loan over three years, compared with 18.9 per cent at NatWest, 20.1 per cent at Halifax, 21.4 per cent with Bank of Scotland and 22.9 per cent with Leeds.

'Direct Line would know about NatWest because I pay for my motor insurance with my NatWest Access, but they would have no reason to know about the other accounts or where I have my mortgage.'

The spokeswoman said that the current loans used for comparison were Abbey National, NatWest, Halifax and Leeds Permanent Building Society.

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