1st Sep 2023 08:36
(Alliance News) - Direct Line Insurance Group PLC charged existing home and motor customers more for their renewals than if they had been a new customer, the UK financial regulator said on Friday, and it will provide redress costing about GBP30 million.
The Financial Conduct Authority said Direct Line will carry out a voluntary review of past business to "identify all instances where a customer has been overcharged and provide appropriate redress" where the FCA's pricing rules were violated.
The FCA said customers don't need to do anything, as they will be contacted by Direct Line.
Direct Line confirmed the FCA announcement on Friday, saying the review relates to pricing practices regulation put in place by the UK financial services regulator at the start of 2022.
"An error in our implementation of these rules has meant that our calculation of the equivalent new business price for some customers failed to comply with the regulation," Direct Line said.
"As a result, those customers have paid a renewal price higher than they should have."
The FTSE 250 company estimates the redress payments to customers will cost it around GBP30 million, for which half was provided in its 2022 results.
Direct Line said Friday's announcement was unconnected to one it made in late June of a past business review of motor total loss claims.
Direct Line shares were down 1.6% to 159.60 pence early Friday in London.
By Tom Waite, Alliance News editor
Comments and questions to [email protected]
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Related Shares:
Direct Line