By Ian Walker
LONDON--The U.K. Financial Conduct Authority said Monday
insurance providers don't always provide customers with clear
information about payment options when they buy general insurance
products, meaning they could struggle to compare the difference
between paying upfront or in installments.
The review of online sales of home and car insurance products
found that an adequate explanation of a proposed credit agreement
wasn't always provided sufficiently early in the customer journey
to enable customers to make informed decisions, and in some cases
it wasn't made clear that a fee would be charged.
The FCA added that firms acting as a credit broker didn't always
disclose the name of the credit provider or details of their
relationship with the firm.
The regulator has been reviewing online sales of home and car
insurance sales across 13 insurers and 30 insurance intermediaries,
including four price comparison websites.
If a firm is providing regulated credit or is acting as a credit
broker, they are required to provide a representative example
setting out the interest rate, any fees or charges, a
representative annual percentage rate and the total amount payable,
the FCA said.
However, FCA researchers found a number of cases where this was
either not provided or the example didn't include all of the
required information, potentially limiting a customer's ability to
make an informed choice about how to pay, the regulator said.
"Consumers should expect clear information about the payment
options available to them," Linda Woodall, acting director of
supervision at the FCA, said.
"Regardless of whether people choose to pay upfront or in
installments, 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," she added.
Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749
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