The Association of British Insurers (ABI) has cited the Competition & Markets Authority’s (CMA) failure to tackle the excessive charges made by credit hire firms for replacement vehicles as “bad news for consumers.”
The ABI said that instead of “driving down excessive costs, this U-turn on their proposed cap on these charges is likely to lead to higher charges for consumers.
Commenting on the CMA’s final report of its investigation into the private motor insurance market published today, James Dalton, ABI’s Head of Motor Insurance, said: “Today’s CMA report is the culmination of three years of work and has cost taxpayers millions of pounds. The fact that it fails to do anything to address the excessive costs of replacement vehicles – a problem that the CMA itself identified – will be a bitter pill to swallow for honest motorists.”
He noted that “far from reducing the cost of car insurance, the CMA’s inaction simply entrenches the business models of some replacement vehicle providers who profit from inflating car hire charges at the consumer’s expense. The reality is that the CMA has ducked this challenge and when regulators fail, politicians need to step in to act.”
Addressing other measures in the report Dalton said that banning restrictive price arrangements by price comparison websites (PCWs) such clauses “prevent insurers from offering a cheaper deal to customers through their own website or another PCW,” and that they “should be banned. So consumers should welcome this move which should provide more options when shopping around.”
He also indicated that “consumers need relevant and clear information to make an informed choice about the add-on products they are buying, and we are already working with the Financial Conduct Authority in this area.”
Source: Association of British Insurers (ABI)
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