FCA proposes guidance to ease consumers’ cancellation and refund woes
3rd August 2020
The Financial Conduct Authority (FCA) has opened a consultation on guidance designed to help consumers identify their options to claim a refund for any cancelled travel or events caused by the Coronavirus (Covid-19) as quickly and easily as possible. The FCA is proposing that the proposed measures should be effective for six months following the publication of its final guidance which it aims to do at the end of September 2020.
The guidance sets out what the FCA expects from insurance providers as well as credit and debit card firms to ensure that consumers who have a holiday or event cancellation are helped towards the provider that is likely to produce the best possible outcome for them. Members may access the guidance by clicking here.
The proposed guidance would apply to any situation where an insurance provider refers a consumer to a card provider for a claim (eg a chargeback claim or a claim covered by section 75 of the Consumer Credit Act (a ‘section 75 claim’)). Under the proposals, insurance firms would be expected to:
- Take ‘reasonable steps’ to minimise the possibility that they refer their customers to card providers, where this would not be in the consumer’s best interests (ie where they are unlikely to have a valid claim with their card provider).
- Explain to their customers why they are asking them to go to their card provider first (where relevant).
- Explain to their customers the benefits of claiming with their card provider, and why this might lead to a better outcome for them.
The FCA is asking for comments on this guidance consultation by 13th August 2020. BIBA will be submitting a formal response to the consultation and members who would like their comments to be taken into consideration as part of this process should send them to David Sparkes at [email protected] by Monday 10th August.
BIBA members’ compliance and regulation queries should be directed to: [email protected].