FCA to tackle predatory practices by insurance firms leading to high premiums for vulnerable customers
4 October 2019
Today the Financial Conduct Authority (FCA) has launched the interim report of its market study into the pricing of home and motor insurance. The report concludes that around 6 million policy holders are getting a poor deal, collectively overpaying by around £1.2 billion a year. About 1 in 3 of these customers are considered vulnerable, with circumstances in their lives such as mental health problems that can make switching provider more difficult. The FCA points to purposeful tactics by firms to drive up prices, including putting up barriers to switching and setting prices based on a customer’s likelihood of switching, as well as proposing a range of potential remedies.
In response, Helen Undy, Chief Executive of Money and Mental Health, said:
“Today’s report confirms that predatory insurance firms are taking advantage of the difficulties that many vulnerable customers face when switching insurance providers, collectively costing them billions in unnecessary changes. Switching insurance can be difficult at the best of times, but for people living with mental health problems who may be struggling to get out of bed, use the phone, navigate comparison sites or understand complex pricing, it can be impossible.
It is shocking that insurance firms have got away with increasing prices for those customers who are least able to switch. We’re pleased to see the regulator’s plans to crack down on these unfair practices and hope to see strong action taken soon.”
For more details, or to set up an interview, please contact Helen Undy on 07935 216 804 / 0207 848 1448, firstname.lastname@example.org
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About the Money and Mental Health Policy Institute