There is a significant amount of competition within the car insurance industry between the likes of insurance brokers and price comparison websites for your business. There are a number of factors that you will consider before deciding who to arrange your car insurance with such as the price, the level of service you receive leading up to point of sale and the reputation that the business that you are dealing with has.
So, with regard to the later point, you would have thought that you could have full confidence in Swinton who arrange the likes of car and home insurance on behalf of many clients and have been doing so for many years. Bearing in mind that they have just been fined £7.4 million for incorrectly selling “add-ons” to home insurance and car insurance policies with that being the largest fine in such a situation you may now have your doubts.
Apparently, Swinton did not inform some clients that “add-ons” like car breakdown cover, home emergency cover and personal accident cover were optional extras and also, in some cases, did not adequately explain about these sorts of “add-ons.” As a result of selling various “add-ons” the company received substantial income.
In addition to receiving this fine, they have also set aside in excess of £11 million with a view to some or that entire sum being available to compensate customers. Some £1.9 million has been paid to customers so far.
The Financial Conduct Authority’s (FCA) enquiry covered a period of two years between April 2010 to April 2012.
In addition to what has already been mentioned above the company did not always provide sufficient information about the cancellation policy, they did not always adequately monitor sales calls and they did not treat all customers fairly due to adopting a sales strategy that was, at times, considered aggressive.
It should be noted that when the company appointed a new chief executive he carried out a review of the business as a result of which Swinton reported themselves to the regulator. It is thought that in the region of 650,000 policyholders could have been affected in some way. The company has apologised to customers and, hopefully, has now got their” house in order”.