CCR Magazine

CCRi banner ad
You are here  :Home arrow News arrow FCA proposes an end to opt-out selling of insurance add-ons
Contact Us Newsletter Signup RSS Feeds

Latest News Headlines

Headlines

 
Commercial Credit News

Headlines

 
FCA proposes an end to opt-out selling of insurance add-ons PDF Print E-mail
Wednesday, 25 March 2015

The Financial Conduct Authority (FCA) today announced plans to ban opt-out selling in financial services markets.  Opt-out selling is the practice of defaulting consumers into buying a product which they then have to opt out of, for example by using pre-ticked boxes to sell the consumer add-on insurance.

Following a market study into the general insurance add-ons industry last year, the FCA found that opt-out selling often results in consumers purchasing an insurance product they don’t need. Some consumers are not even aware they have bought an add-on.

Too often consumers are not able to make an informed decision on whether they need or want the insurance that is part of the opt-out package. The FCA will consult with the industry on the proposals which also include introducing guidance for firms so they can give consumers information about add-ons at the right time in the sales process.

Christopher Woolard, Director of Strategy and Competition said:

“This is about ensuring consumers can make the right decision on what add-on insurance they do or don’t need. Forgetting to un-tick a box at the end of a purchase is not making an informed choice.

“Our work shows that the opt-out model means too often consumers are buying a product when they have not been able to give any thought to whether or not they need it. We are all familiar with having to double check whether or not we have accidentally agreed to buy an add-on insurance product when buying car insurance or tickets online for example.

“These proposals will mean that consumers will be in a better position to decide what they want and consider the options available to them. Fewer consumers will end up with products they didn’t want or don’t even know they own”.

The ban would apply to any add-on sales of regulated or unregulated products offered alongside financial primary products, this includes legal expenses sold with home insurance, breakdown or key cover sold alongside motor insurance, or protection cover when taking out a mortgage or credit card.

The FCA also wants firms to provide consumers with more appropriate and timely information that will allow them to make an informed choice on what, if any add-on products they need, and to identify the best package.

The guidance encourages firms to introduce the most common add-ons to consumers earlier in the sales process and make it easier to compare packages of the primary product and add-ons.

The FCA also recommends that firms give the annual price of add-ons rather than relying on monthly figures so that overall price to be paid is easily understood.

The consultation period ends on 25th June 2015.

(Source - FCA Press Release)  

 
CCRI
3 October - Guoman Tower Hotel, Central London 

CCRInteractive, in association with Marston Holdings , is the largest and leading one-day conference from the publishers of CCRMagazine – a truly national and international event for the credit industry.

This landmark event allows delegates to: Learn best practice of how to increase profitable sales in today’s economy. Understand the key compliance issues and how they will impact upon you. Discuss the legislative and regulatory framework and how it will effect you. Consider the potential effects of Brexit on your business. Discover the latest innovations in the market to improve your collections. Motivate your staff to achieve ever improved results.

To book to attend in 2017, contact Stephen Kiely  or Alison Lucas. To find out more about being part of this landmark event, please contact Gary Lucas
CCRI 

 Forums International Ltd

Forums International Ltd

 Attendance at your first meeting is free of charge, and please quote reference 'CCR2016' to receive the special 10% discount off of your first annual subscription.

Find out more here.

latest issue

CCR Cover

The latest edition of CCR Magazine, the leading editorial publication in the UK credit industry, is out.

Read the latest issue online

The Credit Excellence Awards

Awards 

Tuesday 3 October - Guoman Tower Hotel, Central London


Do not miss your chance to meet and network with the Winners and Finalists at the Credit Excellence Awards, in association with Hoist Finance.


To book your place to attend, please contact Alison Lucas.


subscriptions

CCR is the premier magazine for consumer and credit professionals. It provides an independent voice to the industry, breaking major news stories and running in-depth features.

As a magazine, it works with and campaigns on behalf of the credit industry to promote its importance as a centre of potential profit and business development to the wider business world.

Subscribe to CCR Magazine

CCR World Magazine


 

Providing information and analysis for thousands of senior credit professionals worldwide, every quarter.

Find out more

GTS Media Ltd
81 Cambridge Road
Southend-on-Sea
Essex
SS1 1EP

Registered in England No: 05483197