Context
The FCA is consulting on a proposed extension of temporary guidance which was first introduced in October 2020. The guidance is aimed at credit and debit card providers as well as insurance providers and is designed to ensure that firms handle enquiries and claims from consumers in a way that minimises inconvenience to the consumer.
The FCA published the final guidance in October 2020 which is effective until 2nd April 2021 and can be found here: https://www.fca.org.uk/publication/finalised-guidance/cancellations-refunds-helping-consumers-rights-routes-to-refunds.pdf
Key points to note
- The guidance was introduced to address consumer frustraton and inconvenience relating to:
- Complexity and delays in getting pay outs from card and insurance providers
- Insurance providers not explaining adequately to consumers why they are being asked to contact their card provider before making an insurance claim, and the possible benefits of this
- The FCA is proposing that the guidance should stay in force until varied or revoked
- The guidance consultation can be found here: https://www.fca.org.uk/publication/guidance-consultation/guidance-consultation-cancellations-refunds-helping-consumers-rights-routes-refunds.pdf
- In particular, the guidance states that insurance firms should:
- Treat customers fairly and consider what is in the customer’s interest
- Take reasonable steps to minimise the possibility that customers are referred to card providers where this would not be in the consumer’s interest
- Take reasonable steps to ensure consumers have sufficient information to understand why they are being referred to a credit card provider
- Providing information about the benefits of claiming with their credit card provider compared to their policy
- Where an insurance provider requires policyholders to demonstrate or take reasonable steps to mitigate a financial loss under the terms of the policy, consumers should not have to go to unreasonable lengths to do this.
Next actions
Firms can respond to the guidance consultation by 26th February 2021. Responses should be sent by email to cancellationsandrefunds@fca.org.uk