The cross-party group of MPs in the UK have launched a probe into whether insurance overcharging is prevalent in firms and banks.
The MPs, who are on the Treasury Committee, will investigate whether certain groups are excluded from obtaining a basic level of service from banks and insurers.
The inquiry, which will focus on ‘financially vulnerable’ consumers, follows allegations that rip-off insurance firms are charging nearly 10-18 times of the original premium for, home, travel holiday insurance policies.
The Treasury Committee is empowered to examine the expenditure, administration and policy of HM Treasury, with all of its agencies and associated bodies, such as HM Revenue and Customs, the Bank of England, the PRA, the FCA, the Royal Mint, among others.
The investigation follows a study started by the FCA to know how insurance companies are charging their customers for home and motor insurance.
The scope of probe is just not limited to insurers. It will also cover banks and see whether the customers are facing problems due to branch closures, non-availability of overdraft facility and limited availability of free to use ATMs.
Commenting on move, Treasury Committee chair Nicky Morgan said: “Vulnerability, as defined by the FCA, is where someone who – due to their personal circumstances – is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.
“With customers expected to take more responsibility for their financial planning and resilience, bank branches closing, and the number of free-to-use ATMs falling, it’s becoming increasingly difficult for vulnerable customers to access certain financial services.”
As part of this probe, the committee will organise sessions outside of parliament to hear from vulnerable consumers who have been overcharged by financial services providers.