RAC forced to apologise
The RAC has been forced to issue an apology to more than one million of its insurance customers because of failing to include the previous year’s premium on the renewal letters they sent to customers, according to Honest John.
The Financial Conduct Authority (FCA) found that the letters did not comply to new industry rules to promote competition in the market, which states that renewal premium must be specified clearly alongside the previous premium.
The new rules also say that insurers must add a message on their renewal letter encouraging long term consumers to shop around.
Switching insurance at renewal time is widely promoted by insurance experts because changing cover provider can bring down the price of the policy. Customers might not think to look for a better deal when they do not know what they paid the year before.
‘It is simply unacceptable to see that some firms are still not being properly transparent with their customers a year on from the introduction of the rules,’ said Jonathan Davidson of the FCA.
Some of the RAC’s breakdown customers will have financial compensation, but the number of customers or level of recompense is still unknown.