FCA has published a guidance consultation on how firms should be helping customers with rights and routes to refunds. The guidance builds on FCA’s previous statements on consumers’ rights when their trips, holidays and other events are cancelled, and its guidance for consumers on what refunds they could claim and how.
This guidance is aimed at credit and debit card firms and insurance providers, and is designed to ensure they handle claims in a reasonable timescale, fairly and in a way that minimises inconvenience to the consumer.
Key messages from the guidance are:
- if a consumer is eligible to make a s75 claim, this can often lead to a better outcome relative to an insurance claim. But insurers need to explain to consumers why this is the case and how they should do it. FCA notes that s75 claims may not always be possible, either and consumers who are sent to their providers in these circumstances will feel unfairly treated and frustrated;
- firms should take reasonable steps to minimise the possibility that they refer customers to card providers where this is not in the customer’s interest – so should, for example, be asking questions to help assess whether the customer is likely to have a valid claim, providing case study examples and considering what arrangements they might put in place with card providers to reduce the scope for consumers being unfairly passed between firms;
- policyholders should not have to go to unreasonable lengths to show they have tried to mitigate any financial loss before being able to claim under their insurance policies; and
- credit and debit card providers should handle claims in a reasonable timescale, and should explain to consumers the reasons for any delays and for any ultimate rejection of claims.
FCA asks for comment by 13 August.