Express Gifts Ltd, a direct mail order and online business with permission to sell general insurance products, has entered into an agreement with the Financial Conduct Authority (FCA) to provide £12.5m redress to approximately 330,000 customers who were sold insurance that offered little or no value.
The insurance products sold by Express Gifts Ltd covered 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.
After conducting its own quality assurance activity, the firm agreed with the FCA the insurance cover it had sold did not provide adequate value to customers because although it covered all items purchased, these were predominantly items of clothing, which customers would not generally consider insuring.
Jonathan Davidson, Director of Supervision – Retail and Authorisations at the FCA, said:
“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.
“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.”
Express Gifts Ltd will write to all affected customers with details of how they will be paid the redress due. Any redress will be sent automatically, so customers do not need to take action. However, if customers have any questions, would like further information, or their contact details have changed, the FCA recommends they contact the firm using the details provided on the firm’s website[1].
Notes to editors
- The FCA recently published the first set of data in the general insurance value measures pilot. This publication is aimed at promoting transparency, both helping consumers and influencing firm behaviour.
- On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.