DURING the past year most of us have felt the effects in our wallets.

Car insurance firms have raised their prices for the BB postcode by 30 per cent on average.

It has baffled many as even those with full no-claims have been hit.

Earlier this year the anger was directed at crash-for-cash gangs after insurance companies pointed the finger of blame at crooks staging accidents for compensation claims.

But Jack Straw has discovered the real truth – which puts insurance companies back in the firing line.

The Blackburn MP investigated the matter for six months and discovered it is actually the amount of personal injury firms operating in the area that has caused the rise.

And it gets better. Insurance companies are selling the details of potential compensation claimants to these companies for between £200 and £1,000 a time.

The payouts eventually end up costing insurance firms and that is why they have put the price up.

Mr Straw deserves great praise for uncovering what he calls the industry’s ‘dirty little secret’.

Regulators now need to act on his suggestions for reform to put a stop to this racket.