FCA guidance consultation: Refunds for Insurances and Card Providers - Which? response

Which? has welcomed the FCA measures for insurance customers who may be suffering financial difficulties as a result of coronavirus. We agree that as well as supporting those in financial difficulties, regulatory action is needed to mitigate the harm that is prevalent in consumers dealing with cancellations and refunds. So we broadly welcome the FCA’s proposals for firms to provide better support to consumers seeking a refund.

In April, Which? set out a 10-point plan on maintaining consumer trust and confidence in the travel sector, as a result of widespread cancellations following the outbreak. We have since been calling on the Government, regulators and industry to take swift action to ensure consumers are not left out of pocket and that their rights are upheld. This includes:

• Travel insurance terms and conditions should be more transparent and clear with customers signposted to relevant parts of their insurance policy booklets. This will make it easier for policyholders to know if they are covered and will help customers to find out what they need to know as quickly as possible, providing specific answers to their questions.
• Time-limits on making claims should be relaxed. This will help customers who are struggling to get in touch or communicate with travel companies as a result of the pandemic.
• Insurers should extend existing travel insurance policies, where relevant, to ensure the customer remains protected when stranded abroad. This will help those who cannot get home because of government-issued advice or restrictions on travel imposed by governments (i.e. through no fault of their own).
• Insurance providers must work more closely with the travel industry and the Government to ensure that all information given to consumers about how and when to claim is clear and consistent. This will stop people from being passed between providers and ensure they know who to contact when, for example, seeking reimbursement from their provider before turning to their insurer.