Covid-19 (coronavirus)

Section 75 complaints 

With section 75 complaints, the things we’ll look at in particular include the following:

• When deciding what’s fair and reasonable, we’ll always consider individual circumstances. 
• We expect card issuers to consider chargeback and section 75 claims where appropriate, regardless of how the consumer expressed their claim.
• We expect businesses to consider whether they should pay any consequential losses. 
• We’ll take into account whether consumers have already been able to recover financial losses from the suppliers. 
• We expect businesses to treat consumers in financial difficulty positively and sympathetically.

Read more about our approach to complaints about goods and services bought with credit.

Financial difficulties 

When handling a complaint about financial difficulty, the things we’ll look at in particular include the following:

• When deciding what’s fair and reasonable, we’ll always consider individual circumstances. 
• We expect businesses to treat consumers in financial difficulty positively and sympathetically, fairly and with forbearance – in line with FCA’s principles and rules (set out in the Consumer Credit Sourcebook (CONC)).
• We expect businesses to listen to consumers and proactively look for signs of financial difficulties. Consumers may not always know the best way to express their concerns. 
• If a consumer is facing financial difficulty, we expect businesses to consider forbearance measures such as token repayment plans, freezing interest and charges, reasonable arrears rescheduling and debt write-off where appropriate.

• Given the extraordinary circumstances, we may expect businesses to think about additional forbearance measures alongside the above, such as payment freezes, and have regard to the temporary measures introduced by the FCA in April 2020 and July 2020, and the finalised guidance introduced in October 2020. These are designed to provide temporary or longer term tailored financial relief for customers affected by Covid-19 on products such as credit cards, loans and overdrafts.

• The FCA also confirmed targeted temporary measures to cover motor finance and high-cost credit agreements in April 2020 and July 2020, which include: high-cost short-term credit (including payday loans), buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking. The finalised guidance is relevant to some of these products also.
• We’ve issued specific guidance on this page for people having difficulty with their mortgage payments or car finance.

Read more about our approach to complaints from consumers who are in financial difficulties.

Car finance – and other hire purchase/conditional sale/lease/hire agreements

The things we’ll look at in particular, include the following:

• When deciding what’s fair and reasonable, we’ll always consider the individual circumstances.
• We expect businesses to listen and proactively look for signs of financial difficulty. Please refer to our guidance on financial difficulty above. 

• Given the extraordinary circumstances, we expect businesses to be even more flexible in their forbearance measures, as set out above. We’d also expect them to consider the specific needs of an individual to stay mobile at this time. The FCA confirmed targeted temporary measures to cover finance and high-cost credit agreements in April 2020 and July 2020 which include: high-cost short-term credit (including payday loans), buy-now pay-later (BNPL), rent-to-own (RTO) and pawnbroking. It released finalised guidance in October 2020. 

• We expect businesses to fully inform consumers of their options to exit the agreement where necessary or appropriate. Different exit options result in different liabilities for consumers. Businesses should give them a clear explanation of the different options. This is to allow consumers to understand fully the implications on the amount which would remain outstanding on their loan under each of the termination options. Businesses should also alert consumers to any impact this may have on their credit file.
• We remind businesses that reporting to credit reference agencies should not only be accurate but also fair in the circumstances.
• If there is a dispute about the quality of the goods, and where the normal ways of inspecting the goods aren’t available, we’d expect businesses to be flexible and use initiative in trying to resolve complaints.

Read more about our approach to complaints about car finance. 

The FCA has set out information for insurers during the pandemic.

Travel insurance 

The things we’ll look at in particular, include the following:

• We’ll always consider individual circumstances including the relevant policy terms, when bookings were made and when the policy was taken out.
• We’ll take into account whether consumers have already been able to recover financial losses from their airline, tour operator, bank or credit card company.
• We’ll consider foreign and domestic government information about travel restrictions in the same way as the FCDO advice, taking account of policy terms.
• We’ll consider self-isolation and cancellations due to sickness in the same way as we do with ‘travelling against medical advice’.
• We expect insurers to take a pragmatic view of decisions not to travel or to curtail a trip. We’ll bear in mind factors such as the purpose of travel, the rapid pace of changing advice and the ability of consumers to contact their insurer at the relevant time.
• We recognise the challenges of validating some claims. However, we expect consumers to be treated fairly, and we encourage insurers to consider carefully the available evidence including credible consumer testimony.

• We recognise that some consumers may have taken the difficult decision to cancel their trips earlier than insurers might usually expect. But insurers should consider whether a later claim would have been accepted – for example, if travel advice or restrictions would have meant the consumer would have ultimately had to cancel before departure date.

Read more about our approach to complaints about travel insurance.

Business protection (interruption) insurance 

The impact of Covid-19 on businesses has generated numerous business interruption insurance claims. Businesses have been affected, for example, because their staff are unwell or following government guidance to self-isolate, or because customers are unwilling or unable to make purchases in the light of government guidelines and restrictions.

We will consider the Supreme Court's judgement in the FCA’s business interruption test case and continue to take relevant law, including case law, into account when resolving complaints. If small businesses are unhappy with how their financial provider has handled their complaint, they should come to us and we’ll see if we can help.

In all cases with our service we stay in touch with the individual businesses and insurers to keep them informed. We continue to engage with a range of stakeholders on this issue, including those representing small businesses.

• When looking at claims that arise from something related to coronavirus, the starting point remains the policy terms and whether the claim falls within them.
• If the claim falls within the scope of the policy then the insurer should pay the claim in line with the policy or explain why an exclusion or condition in the policy means it doesn’t need to do that.
• But insurers should not only consider a strict interpretation of the policy terms but what’s fair and reasonable in the circumstances – taking into account in particular the unprecedented situation that the response to the virus has created.
• Insurers should take into account government and industry guidance in making claim decisions.
• On 5 March 2020 the UK Government listed  coronavirus as a “notifiable disease”, a requirement for a valid claim under some policies. In addition, on 17 March 2020 HM Treasury confirmed that “government advice to avoid pubs, clubs theatres, etc is sufficient for businesses to claim on their insurance where they have appropriate protection cover for pandemics in place”.
• On 23 March the Government said people should only leave their properties for one of four exceptional reasons and ordered the closure of non-essential shops and public spaces.
• Of course, given the fast-moving nature of the situation, many firms making business interruption claims may already be in financial difficulty because of a sudden loss of trade. Insurers might wish to consider where there’s a potentially valid claim if there’s scope to make interim payments earlier than they might otherwise do. The FCA has set out its expectations for insurers where cover is provided for within the policy.
• If we decide your customer has lost out we’ll tell you how to put things right. In most cases, this will mean putting your customer back in the position they’d be in if things hadn’t gone wrong. We might tell you to pay interest on top of (or as part of) any payment we recommend. Interest on an award is usually calculated from the date the customer should have had the money until the date it was actually paid. In most cases, we think a rate of 8% simple per year is appropriate to reflect the cost of being deprived of money in the past. Read more about our approach to calculating compensation. 

Wedding insurance

We’ll consider what’s fair and reasonable taking into account all the circumstances – in particular the unprecedented situation created by the Covid-19 epidemic. We expect any insurer to remember its duties to deal with claims fairly and promptly, and not to reject a claim unreasonably.

Bearing that in mind, these are the sorts of issue an insurer might want to consider when dealing with a wedding insurance claim:

• Does the policy cover cancellation or rearrangement?
• Does it cover claims arising out of an outbreak of infectious or contagious disease?
• If so, but the insurer is relying on an exclusion to refuse the claim, for example for government act or regulation, the points to consider may include the following:
• Is government act or regulation defined in the policy – and if so, is it clear that this epidemic would be covered by that definition? What specific piece of legislation or regulation does the insurer think is relevant to the claim?
• If it isn’t defined then, thinking about the usual meaning of those words and considering the context of the clause in which the exclusion applies, is it reasonable to say it applies here?
• If it does apply, would the wedding otherwise have been able to go ahead – or would it have been cancelled in any event, perhaps because participants were themselves unwell or self-isolating? If so, it might not be fair to rely on the exclusion.

Insurers should not only consider the policy terms but also what’s fair and reasonable in the circumstances. So even if an exclusion does apply, we’d still expect insurers to take into account the unprecedented situation created by the Covid-19 response in deciding whether to rely on the exclusion.