Countless RAC customers might get compensation after firm breaks insurance rules

MORE than the usual million RAC customers could be set for compensation after the insurer was found to be breaking the rules on showing renewal costs.

Rules created by city watchdog the Financial Conduct Authority (FCA) forces insurers to "clearly display" the cost a customer taken care of last year's cover, alongside the brand new proposed price to renew the insurance policy.

The rules are meant to encourage Brits to shop around if they're unhappy with the new price.

But the FCA found the RAC was neglecting to display prominently both last year's and also the proposed new price – and a message about looking around – in policy letters delivered to customers.

That means as much as 1.2million customers could have been left unsure about how exactly much their premium was going up by – and is in line for compensation consequently.

The roadside recovery firm is now writing to affected customers explaining that it hadn't displayed the information properly.

The watchdog warned in October that a quantity of insurers were flouting the transparency rules – even though they came into force in April this past year.

The FCA was not able to confirm which customers could be eligible for compensation or just how much could be refunded – but it's thought it's speaking to numerous firms, such as the RAC, about a redress package for all those affected.

It is also urging people who feel that they didn't obtain the right information at renewal time for you to contact their insurer on to find out if they'll be entitled to anything back.

Jonathan Davidson, executive director of supervision, in the FCA said: "It is simply unacceptable to see that some firms are still not properly transparent using their customers annually on from the introduction from the rules.

"Firms failing to understand this right may have led to consumers losing out as they do not have the right information to determine whether or not to look around.

"We've already acted where we view particularly poor practice in firms and can continue to do so where we see firms not transparent.

"As we said in October, we expect other firms to take notice of these issues, to look at what they're doing and also to make sure they are setting it up right."

A spokesman for that RAC told the sun's rays: "While our breakdown policy renewal documentation did accurately contain all the information you need, we recognise that some of the key information in our letters was not as prominently displayed because it should have been.

"We continue being committed to giving members clear and fair information so they can make the right decision and therefore are contacting those affected to be satisfied."

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