The Financial Conduct Authority (FCA) is considering action after a market investigation found consumers were being overcharged by up to £200m each year for products bought alongside cars, holidays and phones.

Christopher Woolard, director of policy, risk and research at the FCA, said: “There’s a clear case for us to intervene. Competition in this market is not working well and many consumers are simply not getting value for money. Firms must start putting consumers first and stop seeing them as pound signs.”

The FCA has proposed banning pre-ticked boxes, forcing firms to publish claims ratios and breaking the point of sale advantage for guaranteed asset protection (GAP) insurance, usually offered alongside car sales.

During its investigation, the FCA reviewed the experiences of over 1000 consumers and found a lack of competition and information at point of sale was preventing consumers from making comparisons and informed decisions about products.

Some 25% of consumers who bought insurance products as an “add-on” were not aware that they could buy the product separately elsewhere, while 38% said they had not planned to buy add-on insurance before the day of purchase.

The FCA is proposing a requirement that asks customers who purchase GAP insurance as an add-on to confirm that they want the product in the days following the sale of the primary product.

The regulator’s other remedies include banning pre-ticked boxes to ensure consumers actively choose to buy an add-on and are clear when and how they are purchasing a product and requiring firms to publish claims ratios to highlight low-value products, pressuring providers to deliver better value to their customers.