You may have seen reports about the RAC falling foul of the FCA’s Renewal Transparency rules.
The FCA found that the firm was failing to display the prior and current year's premiums and shopping around message as key information in its breakdown policy renewal documentation.
The requirements were introduced in April 2017, and ALL firms should have amended their processes by that date.
Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations at the FCA said:
“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. Firms failing to get this right may have led to consumers losing out as they do not have the right information to decide whether or not to shop around.
“We have already acted where we have seen particularly poor practice in firms and will continue to do so where we see firms not being transparent. As we said in October, we expect other firms to take notice of these issues, to look at what they are doing and to make sure they are getting it right.”
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In October 2017, the FCA issued a strong warning to all firms to remind them to ensure that it was complying with the rules and we now see that the FCA is prepared to take action where it feels it is being ignored. This latest action should be seen as the FCA now beginning to lose patience in this area, and more action will undoubtedly follow if the transparency rules are found to be not complied with.
We urge all firms to review their consumer renewal letters to make sure that both current and last year’s renewal prices are shown clearly and that the appropriate “shopping around” message is clear.
Please speak to your RWA Business Manager if you require assistance.