FCA find mis-selling in insurance

[Michael Browne]

The PPI mis-selling scandal has dogged the banking world for a long time now, and bothered everyone with a variety of spam messages and mithering claims companies.

 

Now, it looks like we might have another mis-selling scandal, thanks to the insurance world.

 

The FCA think that insurance agents have potentially mis-sold policies to consumers, as well as falsifying documents, faking signatures, and sold products to people that will never, ever pay out.

 

The Financial Conduct Authority has been looking into all this, and said that their study of 15 insurance firms and the agents found widespread examples of poor practice.

 

They've also found companies that have failed to discipline an agent after they'd spotted their mis-selling deeds, and their falsification of customer documentation.

 

Other discoveries showed agents selling travel insurance to people with medical conditions, which aren't covered by the policy they ended up with.

 

As such, the FCA have given the insurance world a chance to sort themselves out, and ordered 'Section 166 reviews' on two companies, which means tha they'll have to pay for an independent firm to come in and review the way they do things.

 

Another two companies have been told to stop all sales activities. Sadly the FCA haven't named anyone in all this.

 

"General insurance is a large and important sector and we are concerned about the potential for customer detriment arising from the lack of oversight of appointed representatives," Jonathan Davidson, FCA director of supervision, said in a statement.

 

"All principal firms need to consider these findings and look again at their practices."

 

We wouldn't be surprised if there's compensation coming the way of people who have been mis-sold, in yet another headache for the UK's financial sector.

 

 

http://www.bitterwallet.com/insurance/fca-find-mis-selling-in-insurance-92730

[ThedaBara]

I'm currently trying to find out whether insurance firms who automatically renew without authorisation can force the customer to pay a fee when they try to cancel the policy. Did the customer aquiesce to the renewal by remaining silent? TB

[unclebulgaria67]

I'm currently trying to find out whether insurance firms who automatically renew without authorisation can force the customer to pay a fee when they try to cancel the policy. Did the customer aquiesce to the renewal by remaining silent? TB

 

Just seen this.

 

When you buy Insurance you should be told all important information. This should include auto renewal if the payment method you select can be used for auto renewal. Now because most arrange online, this information will be contained in documents which might be viewable in a link if clicked on, before confirming payment to buy the Insurance. If you don't read it online, you would have to read the policy documents when they arrive in the post. Most people don't read their documents. They will scan read the letter to see if they need to do anything, check the certificate of Insurance and then put the documents somewhere safe.

 

Auto renewal is often a part of the Insurance contract. It is not a compulsory element and if you want Insurers to switch off this feature you can ask them to do this. If you don't bother to do this, accept the contract as written and then don't bother to read the renewal, the policy may be auto renewed. If the Insurers then have to cancel because you have taken out Insurance elsewhere then of course a cancellation admin fee can be charged, if it is part of the contract. If you never received any renewal documents, then you have a strong argument for Insurers to waive any admin fees.

 

In regard to the FCA miss-selling, where serious breaches have been found, i always find it disappointing that the FCA does not name the companies. I can understand why they don't, as it might put them out of business and be ruinous for investors, but if a company have had previous warnings, i don't understand why consumers should be left in the dark.

[hightail]

Auto renewal is often a part of the Insurance contract. It is not a compulsory element and if you want Insurers to switch off this feature you can ask them to do this.

It is the default setting whether you renew online or by phone. We shouldn't have to insist it's 'switched off' we should be given a clear choice to take it up if we wish. I renew by phone, pay the full premium up front and have to be quite forceful every year in making it clear that they do not have continuous authority.