Millions of RAC customers could get compensation after firm breaks insurance rules
The insurer has been found by the Financial Conduct Authority (FCA) not to be clearly showing how much customers' renewal premiums would be rising by
MORE than a million RAC customers could be set for compensation after the insurer was found to be breaking the rules on showing renewal costs.
Rules introduced by city watchdog the Financial Conduct Authority (FCA) forces insurers to "clearly display" the cost a customer paid for last year's cover, alongside the new proposed price to renew the policy.
The rules are meant to encourage Brits to shop around if they're unhappy with the new price.
But the FCA found the RAC was failing to display prominently both last year's and the proposed new price - and a message about shopping around - in policy letters sent to customers.
That means as many as 1.2million customers could have been left unsure about how much their premium was going up by - and could be in line for compensation as a result.
The roadside recovery firm is now writing to affected customers explaining that it hadn't displayed the information properly.
What to do if you think you're affected
IF you're an RAC customer, here's what you should do.
The firm is writing to affected customers over the coming months, explaining how it failed to clearly display renewal prices, so you should wait for the firm to contact you.
The FCA was unable to confirm what level of compensation would be paid and who would be eligible but the letters will likely outline details of any refunds being given.
The watchdog has also warned that other firms - not just RAC - are failing to adhere to the new rules and said it expects them to take "immediate action" to make sure they are.
Any customer that thinks they didn't receive the correct information at renewal time should contact their insurer in the first instance.
The watchdog warned in October that a number of insurers were flouting the transparency rules - even though they came into force in April last year.
The FCA was unable to confirm which customers would be eligible for compensation or how much would be refunded - but it's thought it's speaking to a number of firms, including the RAC, about a redress package for those affected.
It is also urging those who feel that they didn't get the right information at renewal time to contact their insurer straight away to see if they will be entitled to any money back.
Jonathan Davidson, executive director of supervision, at the 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.
"Firms failing to get this right may have led to consumers losing out as they do not have the right information to decide whether or not to shop around.
"We have already acted where we have seen particularly poor practice in firms and will continue to do so where we see firms not being transparent.
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"As we said in October, we expect other firms to take notice of these issues, to look at what they are doing and to make sure they are getting it right."
A spokesman for the RAC told the Sun: "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.
"We continue to be committed to giving members clear and fair information so they can make the right decision and are contacting those affected to ensure they are satisfied."
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