Express Gifts will pay out £12.5m of redress to its customers, in relation to a product called Property Insurance from January 2005 to August 2008 and Purchase Protection Insurance from September 2008 to May 2015. The policies were designed to cover the firm’s Ace or Sudio brands, which were meant to protect customers’ purchases against accidental damage or theft.
Premiums were calculated as a percentage of the customer account balance.
As most customers bought clothes from Express Gifts, which would not normally be protected by insurance, the Financial Conduct Authority ruled that the policies did not provide adequate value to consumers. After carrying out its own investigation into the policies, Express Gifts agreed with the regulator. In a statement on its website, it said: “In some cases, the insurance was provided for low cost and/or consumable products for which this type of cover was unsuitable.”
Jonathan Davidson, director of supervision, Retail and Authorisations at the FCA, said: “It is good news for consumers that Express Gifts has reached agreement with us that this insurance was of low value to customers. It is important that firms offer value for money.
“We expect firms to identify where insurance products of little or no value have been sold to customers and take appropriate action. There is a responsibility on firms, whether they are responsible for the design or the distribution of these products, to ensure the products offer value for their customers.”
Express Gifts will write to all affected customers with details of how they will be paid the redress due. Any redress will be sent automatically, so customers do not need to take action. The FCA recommends that any customers who require further information contact the firm using the details on its website.