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Sales of insurance products for items customers would not generally consider insuring has landed Express Gifts Ltd in hot water with the Financial Conduct Authority (FCA).
The company has entered into an agreement with the regulator to provide a £12.5 million redress to approximately 330,000 customers who were sold insurance that the FCA deemed “offered little or no value.”
The insurance products sold by Express Gifts Ltd provided cover against accidental damage and theft for all products purchased from their Ace or Studio brands. The insurance was called “property insurance” from January 2005 to August 2008 and “purchase protection insurance” from September 2008 to May 2015, with premiums calculated as a percentage of the customer account balance. This type of cover is no longer offered by the firm.
On the back of a quality assurance activity, the firm agreed with the FCA that the insurance cover it provided did not give adequate value to customers because it was predominantly for items such as clothing, which are not generally insured.
“It is good news for consumers that Express Gifts has reached agreement with us that this insurance was of low value to customers. It is important that firms offer value for money,” said Jonathan Davidson, director of supervision of retail and authorisations at the FCA.
“We expect firms to identify where insurance products of little or no value have been sold to customers and take appropriate action. There is a responsibility on firms, whether they are responsible for the design or the distribution of these products, to ensure the products offer value for their customers.”
As part of the redress, Express Gifts Ltd will write to all affected customers and send the redress automatically so there is no need for action from customers.
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