Insurance industry comes under fire from FCA over opaque premiums
The insurance industry has come under fire from the Financial Conduct Authority (FCA) over the opaque cost of paying premiums by instalment, warning that consumers were being left in the dark over cost differentials from paying monthly or yearly.
Online sales from insurers, brokers and price comparison websites have all been singled out for criticism for making it difficult to compare products side by side and have been ordered to rectify this.
Linda Woodall, acting director of supervision at the FCA, commented: "Consumers should expect clear information about the payment options available to them.
"Regardless of whether people choose to pay upfront or in instalments, 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."
Home and car insurance were among the sectors looked, which involved employing investigators to follow the purchase process through to inputting their payment details to compare pricing between 13 insurers, 30 intermediaries and four price comparison websites.