The RAC must contact its customers after the Financial Conduct Authority (FCA) found that the roadside recovery and insurance group failed to properly implement transparency rules and provide a shopping around message as key information in its breakdown policy renewal documentation.
The FCA rules, introduced in April 2017, require firms to clearly show the insurance premium a customer paid last year alongside their proposed renewal premium. They also require firms to show a prominent, clear and straightforward message to encourage customers to shop around for the best deals.
Customers due compensation?
In a statement on the regulator's website, Jonathan Davidson, executive director of supervision at FCA, said: ”It is simply unacceptable to see that some firms are still not being properly transparent with their customers a year on from the introduction of the rules.”
The RAC said it would contact affected customers over the coming months, Reuters reported. One source familiar with the situation said some customers could be due compensation.
A spokesperson for the private equity-owned firm told Reuters that the company recognised that some information in its letters had not been clear enough.
“While our breakdown policy renewal documentation did accurately contain all the necessary information, we recognise that some of the key information in our letters was not as prominently displayed as it should have been,” he told the newswire.
The FCA said RAC was the latest firm to apologise to its customers. Last year, insurer Admiral Group PLC (LON:ADM) apologised after the FCA said customers who renewed their policies may have received inaccurate information.