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It was just last week that the Financial Conduct Authority (FCA) launched its market study into how insurers charge policyholders for home and motor coverage… now a new probe will mean further scrutiny for the wider insurance industry as the Treasury Committee examines vulnerable consumers’ access to financial services.
The parliamentary inquiry, whose scope includes banks, aims to find out whether certain groups are excluded from obtaining a basic level of service from providers and whether vulnerable consumers, in particular, pay prohibitively more for financial services products.
Among the areas to be looked at are how providers comply with equality legislation and the mechanisms for enforcement, as well as how regulators hold these firms to account for how they treat vulnerable customers. The probe will also scrutinise how banks and insurance companies ensure that their marketing, communications, and support services are accessible to the likes of consumers with low literacy levels.
“Vulnerability, as defined by the FCA, is where someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care,” noted Rt Hon. Nicky Morgan MP.
According to the Treasury Committee chair, they will be holding sessions outside of Parliament, as part of the inquiry, to hear from vulnerable consumers who have interacted with financial services providers.
“With customers expected to take more responsibility for their financial planning and resilience, bank branches closing, and the number of free-to-use ATMs falling, it’s becoming increasingly difficult for vulnerable customers to access certain financial services,” commented Morgan.
“The Committee will examine the practicality of the FCA’s definition, the effectiveness of attempts by financial services providers to prevent increased financial exclusion, and whether a premium is placed on products such as travel insurance for vulnerable consumers.”
Evidence submissions are welcome until December 14, 2018.
