The Financial Conduct Authority is concerned that insurers and their brokers are not providing the right information to consumers about the different payment options available when purchasing general insurance, like car and home contents cover.
Linda Woodall, acting director of supervision at the FCA said, “Consumers should expect clear information about the payment options available to them. Regardless of whether people choose to pay up front or in instalments, it’s important that they can see exactly what they are signing up for and how much it costs so they can decide whether they are getting a fair deal.”
It’s impossible to work out how good a deal you are getting from your insurer, and how that deal compares to others on the market, if insurers don’t make this information available at the point of sale, and it’s disappointing that the FCA had had to point this out to insurers again.
The FCA highlighted the following issues as being the most problematic:
An adequate explanation of a proposed credit agreement was not always provided sufficiently early in the customer journey to enable customers to make informed decisions.
Firms acting as a credit broker did not always disclose the name of the credit provider or details of their relationship with the firm
In some cases it was not made clear that a fee would be charged.
At this stage the FCA is not taking specific action against individual firms, but confirms that it will do where they continue to find examples of poor practice.
The Association of British Insurers responded by saying that its members will study the findings of the review and work to ensure that all customers understand the cost of different payment options.
As customers it is important that we insist that insurers and brokers make the information available to us at the point of sale, and before we sign any agreements committing us to a course of action that we might not fully understand.