The Financial Conduct Authority (FCA) in UK proposes to ban the practice of ‘pre-ticked’ add-ons in insurance deals. Opt-out selling on websites, where boxes are already ticked when a customer is making an online purchase, are similar traps that consumers fall into all too often.

A survey found that one in five persons were not aware that they were agreeing to pay for these add-on covers when they purchased a particular deal.

The ban will apply to any add-on sales such as legal expenses sold with home insurance.

Some default sale practices like insurance cover sold by budget airlines have already been banned under the Consumer Contracts Regulations.

Christopher Woolard, director of strategy and competition at the FCA, said: “This is about ensuring consumers can make the right decision on what add-on insurance they do or don’t need. Forgetting to un-tick a box at the end of a purchase is not making an informed choice.

“Our work shows that the opt-out model means that too often, consumers are buying a product when they have not been able to give any thought to whether or not they need it.”

The Financial Ombudsman Service has reported numerous cases where buyers of mobile phone packages only discover much later on that insurance, often costing £70 a year or more, has been added automatically without the buyer’s knowledge.
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ource: http://www.theguardian.com


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