The Financial Conduct Authority (FCA) has fined Lloyds Bank General Insurance Limited, (LGBI) over £90m for failing to ensure that language contained within millions of home insurance renewals communications was fair and not misleading.
From January 2009 to November 2017, LBGI sent out nearly nine million renewal communications to home insurance customers, which included language to the effect that customers were receiving a “competitive price” upon renewal.
However, the insurer did not elaborate on the wording of the language and did not verify to see if it was accurate.
The regulator found LGBI caused harm to its home insurance customers as it is likely that the premium quoted to them at renewal would have increased when compared to their prior premium, and the insurer was found to have breached Principle 3 and Principle 7 of the FCA’s Principles for Businesses.
Mark Steward, the executive director of enforcement and market oversight at the FCA, said:
“Firms must ensure their communications with customers are clear, fair and not misleading. LBGI failed to ensure that this was the case.
“Millions of customers ended up receiving renewal letters that claimed customers were being quoted a competitive price which was unsubstantiated and risked serious consumer harm.”