Thematic review planned to assess 'oral disclosure practices' and TCF compliance
The FSA is set to begin a review of the sales practices of general insurance call centres, Insurance Times has learned.
The regulator confirmed this week that a thematic review was planned, looking at the "oral disclosure practices" of call centres.
It will also look at whether customers are being treated fairly and identify examples of good practice, the FSA said.
The news comes as the FSA announced it had fined Carphone Warehouse £245,000 over failings in its telephone sales of mobile phone insurance (see box).
The FSA's review is scheduled to begin later this year or in the first quarter of 2007, although an FSA spokesman was unable to give a more precise timeframe.
The review will involve visits from FSA supervisors in addition to "desk-based work". The FSA spokesman said the regulator could even send review teams out to India and other offshore call centre venues.
Biba regulation and compliance manager Steve White said: "The FSA hasn't really tested the ICOB [insurance conduct of business rules] yet, apart from its review of disclosure documents. Call centres are an obvious place to start as they sell in volume."
Another compliance expert said there were potentially lots of problems with call centres not following the ICOB rules, which deal with sales practices.
The source said: "Call centres have a high staff turnover, more so than any other regulated firm.
"There may not be the level of governance and monitoring that there should be."
Carphone Warehouse fined £245,000 by FSA
The FSA has fined Carphone Warehouse £245,000 for not treating its general insurance telesales customers fairly. The company also failed to inform the regulator in a timely manner of significant systems failures within its telesales distribution channel.
The regulator said Carphone Warehouse had failed to give customers all the information necessary for them properly to understand the insurance product they had bought. Customers were therefore "exposed to the risk of being left with an insurance policy that was unnecessary or provided incomplete cover leading to rejected claims".