Direct Line faces £30m bill for overcharging customers

by | Sep 4, 2023

(Sharecast News) – UK insurer Direct Line has agreed with regulators to review overcharging of existing motor and home policyholders in a move that could cost it £30m to fix.
The company was forced into the move after intervention by the Financial Conduct Authority, marking the first time a formal requirement has been agreed with an insurer under the watchdog’s motor and home insurance pricing rules.

“Direct Line Group will carry out a review to identify all instances where a customer has been overcharged and provide appropriate redress,” the FCA said in a statement.

Under the rules existing customers shouldn’t be a higher premium than if they were a new customer, to stop companies exploiting customers who don’t shop for better deals.

“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. As a result, those customers have paid a renewal price higher than they should have,” Direct Line said in a statement on Friday.

The current estimate of these payments is in the region of £30m of which half was provided for within the group’s 2022 full year results, it added.

Reporting by Frank Prenesti for Sharecast.com

“Direct Line Group will carry out a review to identify all instances where a customer has been overcharged and provide appropriate redress,” the FCA said in a statement.

Related articles

Capita signs two new contracts worth £565m

Capita signs two new contracts worth £565m

(Sharecast News) - Outsourcing group Capita said it has signed two new contracts with the UK and Northern Ireland governments worth a combined £565m. Four months after Capita was selected as the preferred bidder, the group has now confirmed it has sealed the deal to...

Latest Articles

Time for Japan to act (II): State Street Global Markets

Time for Japan to act (II): State Street Global Markets

Written by Michael Metcalfe, Head of Macro Strategy, State Street Global Markets  Writing ahead of the September BoJ gathering in 2022, we argued in Time for Japan to act (first edition!) that the authorities should begin monetary tightening both through moving the...

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

Europe open: Shares slide on hawkish Fed as eyes turn to BoE

(Sharecast News) - European stocks opened in the red on Thursday after hawkish comments from the US Federal Reserve on future rate rises dampened sentiment and investors turned their attention to the Bank of England's own policy meeting. The pan-European Stoxx 600...

Capita signs two new contracts worth £565m

Capita signs two new contracts worth £565m

(Sharecast News) - Outsourcing group Capita said it has signed two new contracts with the UK and Northern Ireland governments worth a combined £565m. Four months after Capita was selected as the preferred bidder, the group has now confirmed it has sealed the deal to...

Rise in UK borrowing limits Hunt’s scope for tax cuts

Rise in UK borrowing limits Hunt’s scope for tax cuts

(Sharecast News) - Britain's budget deficit in August was slightly higher than expected, according to official data published on Thursday, meaning Finance Minister Jeremy Hunt will have less scope for tax cuts ahead of the General Election. Public sector net borrowing...

Join our mailing list

Subscribe to our mailing list to receive regular updates!

No Fields Found.
x