Update from the FCA after complaints that Direct Line are overcharging on renewals. Most mainstream media is reporting that some £30m has been set aside by Direct Line to pay compensation to policyholders on Home and Motor. Details on the timescale aren’t really forthcoming but it’s a process which is likely to take some months.
The amount of compo is likely to be determined by the gross premium on Motor or Home, disregarding any third party bolt-ons or extras like Breakdown, Legal cover etc. plus IPT paid – all of which creates another accounting and reconciliation headache for Direct Line. Some sort of percentage refund calculation, on the actual premium paid to DL seems like the best outcome.
Here’s the word from the FCA;
Direct Line Group has agreed a voluntary requirement having charged some existing home and motor customers more for their renewal than they would have done if they were a new customer.
Direct Line Group will carry out a review to identify all instances where a customer has been overcharged and provide appropriate redress.
Customers do not need to do anything themselves at this stage. Direct Line Group will be contacting affected customers directly.
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