The following guidelines should be considered when assessing if promotional material is appropriate.

  • Content has been approved by an authorised manager;
  • Content includes company name and an address or contact point for example, telephone number at which the full address is available;
  • Nothing is left out whereby the exclusion makes the promotion unclear, unfair, or misleading – for example, early redemption charges;
  • Where a product feature has both benefits and associated; disadvantages both have equal prominence/font size in the promotion;
  • All statements and comparisons are accurate, have been checked and can be substantiated;
  • Any assumptions on which figures/statements are based are prominently displayed;
  • Marketing straplines/taglines do not over-promise;
  • Benefits are factual and not over-stated.


Language guidelines

The following guidelines about language use should be followed:

  • Language is clear and as jargon-free as possible (including for Term and Conditions).
  • Jargon terms that are included are explained or a cross reference to an explanation is provided.
  • Terms which may have a different cultural meaning are explained. For example, a potential customer’s interpretation of family member may include a broader range of people than the product designers had in mind.

Marketing distribution channels for example the use of a church, community or work groups, should be adequately trained and monitored to ensure that accurate and appropriate marketing information is provided.

The use of social networks to market products is very risky as agents are unable to explain adequately the nature of the product or its exclusions.

Where cover is bundled with membership such as union or club membership, it must be ensured that the individual can assess the value of the policy and have the choice of opting out of contributions.



The FSCA highlights the need to embed TCF into the sales process by providing clear information and suitable advice before, during and after point of sale.

Correct and appropriate sales benefit both the company and the customer, leading to-

  • A fairer deal for customers
  • Reduced fall-out rates
  • Increased customer loyalty
  • Customers recommending you to others
  • Reduced cases of arrears
  • Less time spent dealing with complaints
  • A reduced risk of enforcement action by the FSCA

As part of TCF, you must be able to evidence this through effective record keeping. After sales customer surveys can help you assess whether your customers felt they received clear information about products and services.

Consider providing your customers with a simple leaflet or statement advertising the fact that you support the TCF initiative. By showing your commitment to TCF in this way you will not only impress your customers, but you will also demonstrate to the FSCA that you are embedding TCF into the firm’s culture. The statement can also be posted on your website.


Keeping records

To evidence that TCF was implemented at the point of sale you will need to keep records showing that:

  • The representative fully understood the features and risks of the product.
  • The customer fully understood the features and risks of the product
  • The product was suitable for the customer and they could afford it for the expected length of the product .
  • The product recommended was the most suitable from the available options (advised sales) – in other words, the reasons for the recommendation.
  • The customer received the right disclosure documents at the right times, and these were clear, complete, and correct.
  • For non-advised sales, no advice was given, and the customer understood they were receiving information only.
  • Where relevant, the customer understood that there was no obligation to buy any associated product.
  • The customer understood how they were paying for the product or service, and the cost.


Point of Sale

Representatives need to provide clear and fair information to enable customers to make informed decisions about transacting with the financial services providers, its products, and services. This means that product risks, commitments, limitations, and charges must be transparent. Disclosure around bundled products must enable customers to understand the different components of the bundle.

FSP’s must put checks in place to ensure customers receive the right information at the right time and that their personal profile and attitude to risk is considered before a product is suggested or recommended.

As shown out of the previous example it is imperative that representatives make full disclosure to customers regarding the product, product supplier and financial services provider. Full disclosure assists the customer to make an informed decision.

Representatives are reluctant to make disclosures relating to issues which they think might affect the customer’s willingness to transact with them, for example that they are still working under supervision.

Representatives often fail to disclose all information pertinent to the transaction when advising customers to switch products. Therefore, the representative focus on the benefits of switching products but fail to disclose the full costs of such a switch for instance the early termination charges.

Bundling may occur such that the different components of the product and its associated premium or fee are not discussed, nor brought to the attention of the customer. This means that the customer may not be aware of the extent or nature of the insurance or its value or its ability to opt out of the claim.

Management information should be structured as such to enable the FSP to identify such actions and take the necessary action.

Many financial services providers are focused on delivering information but do not give enough consideration to the customer’s understanding. Sometimes large amounts of information are simply read out to customers without a break and customers tend to “switch off” during the conversation. Where a financial services provider conveys a lot of information telephonically, it must consider ways customer’s attention can be retained throughout the conversation.

Awareness should be given to the use of clear and simple language to explain concepts. Terms used in point-of-sale material should be adequately defined by the representative. Words which have an interpretation different form the common use meaning should also be defined. For example, retrenchment has a common use meaning, which is undermine in some contracts through multiple restrictions and limitations.

The terms used are often obscured and glossed over where telephone is used as a point-of-sale channel. For example, a potential customer is asked if they have any judgements, defaults, or a negative financial history. On request for this to be explained the question is simply rephrased as “Do you have any judgements?” No explanation is made of the need to mention undesirable listings on the credit bureau for example. Therefore, the claim is rejected for incorrect information or non-disclosure.

In many instances the emphasis is on concluding the transaction quickly and the customer has no opportunity to check his or her responses.

To meet the TCF requirements, the direct marketer must also define terminology used and explain the implications if incorrect information is provided. The customer must be given the opportunity to check responses. Emphasis must be placed on the importance of submitting the required additional information, for example, the details of additional drivers.


After-sales service

Financial services providers must ensure that the after-sales services meet the requirements of the TCF initiative. Customers must be handled fairly in all aspects of the after-sales service, including providing after sales information, collection of premiums and on-going service.

Financial service providers must also monitor and respond to changes in the wider environment that may affect products and impact on groups of customers.

Financial services providers need to provide customers with ongoing relevant information to enable them to monitor whether the product or service continues to meet their needs and expectations and provide acceptable levels of service for post-sale transactions or enquiries.

On-going contact also ensures that unfair actions, like miss-selling, are afterward discovered or can assist in highlighting suitable products when a current deal is ending or no longer competitive.


Checklist – After-sales service

  • Do you have easily accessible contact details of the end customer?
  • Are there procedures in place when customers update their information or change in circumstance?
  • Do you keep a copy of all correspondence with customers?
  • Could you retrieve this if asked?
  • Do you keep a record of the provision of key-facts documents, or do you have access to these?
  • Do you keep a note of telephone and meeting conversations and could you retrieve these?
  • Do you keep in contact with customers to inform them of any changes on their policy or actions that they need to take on their side?
  • Do you record the above contacts?

Premiums are normally collected by bank debit orders. These debit orders are usually only cancelled when the beneficiary (financial services provider) instructs the bank to do so. Delays in relaying this information to the bank, after a policy is cancelled, mean that premiums or contributions are sometimes still collected. In doing so, the customer may be financially inconvenienced and may find it difficult to recoup the premiums.

Where a customer misses a premium payment, it is difficult for the customer to make up the missed premium. In some cases, the beneficiary (financial services provider) attempts to recover the missed contribution through a double debit the following month. If the customer is not fully aware of this, there may once again be insufficient funds available in the account, which leads to further costs for the customer.

From this, we can learn that financial services providers should ensure that debit orders are cancelled promptly and that arrangements regarding missed payments are communicated to customers.

Financial services providers need to honour representations, assurances and promises that lead to legitimate customer expectations. Legitimate expectations must not be frustrated by unreasonable post- sale barriers.

Reward structures must provide sufficient incentive to the representative to ensure that an on-going service is provided to the customer. Brokers, irrespective of the size of their customer base, must be properly informed of necessary information needed to provide quality after sales service.


Claims handling

Financial services providers must handle claims fairly and consistently. Lack of clear processes often leaves the claimant in an uncertain position.

For example, there may be no formal acceptance and tracking of a claim. Upon query of progress regarding a claim, the claimant may simply be informed that there is no claim.

Financial services providers should not delay claims unnecessarily and should consider paying interest to the customer if a claim is delayed. Clear standards should be set for the claim around times, and management information should track the meeting of these standards.

The following principles can be followed to ensure that the claims handling process ensures fair outcomes for the customer.

All claims must be handled in a prompt manner according to the standards set for claims handling.

There will be circumstances in which the claims handler will need to spend time assessing whether a claim falls within the policy terms or whether there has been material non-disclosure or misrepresentation prior to the policy being bought. No criticism can be made of such conduct. However, where an insurer unnecessarily delays the prompt determination of the claim, it risks being found in breach of TCF outcome 6.

Handling a claim fairly means that all the circumstances of a situation should be considered and to act in a way that gives appropriate priority to the customer’s interests. This requires a provider to put the customer’s interests ahead of its own interests.

When a customer makes a claim, a provider should consider the burden of proof placed on the customer to ensure it does not act as a deterrent to genuine claims. More generally, conduct by an insurer that is designed to discourage the policyholder from pursuing genuine insurance claims constitute a breach of the treating customer’s initiative. For example, the requirement to produce documents which could not reasonably be considered relevant as to whether the claim is valid, or failing systematically to respond to pertinent correspondence, to dissuade a consumer from exercising his contractual rights.”

The duty to provide reasonable guidance to help the policyholder to make a claim builds upon the broader principles under outcome 5 and outcome 6.

It is therefore required that the claims handler proactively provide information to the claimant as to the information and documentation that will be needed before coverage can be confirmed, the time frames for assessment and the contact details of the person with whom the policy holder can make contact.

Where a change in circumstance is reported or a claim is made by the policyholder, the holder must be informed if the change or claim is incomplete in some way, so that the holder’s right to make a claim under the policy is not inadvertently lost.

As well as providing the policyholder with reasonable guidance to help it to make the claim, the provider must provide the holder with appropriate information on the progress of the claim.

This places a duty on the claims handler to update the policyholder at regular intervals on how the claim is progressing and the reasons for any delays. It is therefore not sufficient for a provider to simply rely on its legal rights when investigating a claim and leave the policyholder in the dark; appropriate information must be provided to the policyholder on a regular basis to ensure that the policyholder understand the reasons why coverage cannot be confirmed immediately.

This follows that a provider must not unreasonably reject an insurance claim. This covers not only claims rejected because they fall outside the scope of coverage, but also claims that are rejected by reason of material non-disclosure or misrepresentation at the pre-contract stage, claims rejected for late notification and a provider invoking a contractual right to terminate the policy, for example, by reason of the policyholder’s conduct.

Financial services providers should take care not to dismiss claims on technical grounds, even though the claim would otherwise have been honoured. For example, a late submission of a claim where the delay is excusable, the delay is minor, or the claim period is unusually short and where the insurer did not suffered prejudice.

Where there was non-disclosure of a material fact which the policyholder could not reasonable be expected to have disclosed or where there has been a breach of a condition unconnected with the circumstances of the insurance case it would be unfair to reject the claim (unless there is evidence of fraud by the holder.

Claims handlers should adopt a two-stage approach. You need to consider the legal rights of your company. If there are legal grounds for refusing to pay a claim you must consider a wider set of circumstances to determine if it would be reasonable to refuse the claim.

Circumstances that should be considered are as follows:

  • The literacy levels and financial knowledge of the customer concerned
  • The information provided to the customer before, at and after point of sale
  • The quality of advice provided to the customer
  • The disclosures made to the customer
  • The reasons for non-disclosure of information
  • The reasons for not adhering to technical requirements

Once settlement terms have been agreed payment of claims must be made promptly within the set standards and according to the reasonable expectation of the customer.


 The Didcott principle


The Didcott principle and treating customers fairly

The Didcott principle is based on a judgment in which Judge Didcott suggested that reconstruction of a policy rather than cancellation of a policy is more equitable under certain conditions of non-material disclosure.

The suggestion was that it would be unfair for an insurer to cancel a policy and reject a claim where non-disclosure becomes apparent, if the non-disclosure is of such a nature that the insurer would have issued the policy anyway, even with loaded premiums.

An example of this might be a case where a customer fails to disclose that he is depressive at the time his life is insured. Years later the insured dies in a motor vehicle accident. Had the disclosure been more complete, the insurer would still have originated the policy, but at inflated premiums.

Some in the industry have argued that if the approach is generally known, then unscrupulous customers may deliberately exploit it. The point has been made by the Ombud that where non- disclosure is fraudulent or made with the intention to deceive, the Didcott principle should not apply. However, if the insured’s lack of disclosure was not fraudulent, affording the insurer no liability is unfair.

The view is that insurers that have spontaneously adopted the Didcott principle are treating customers fairly in this regard.



It has been identified that customers are unfairly treated because of poor decisions made by complaint handlers. Complaint handling can be a good indication of a financial services provider’s inclination to be fair and objective in its dealing with customers.

As part of TCF you need to be able to show:

  • That you recognise and deal with complaints systematically and fairly.
  • That customers are aware of your complaints procedure.
  • That the process is uncomplicated and tested with the specific target group for appropriateness.
  • How you use complaint information to improve standards where appropriate.

The complaints process must also not impose language and other barriers for the customer. An example might be one where the complaints process requires written complaints, even where a customer is illiterate. The lack of transparency and difficulty of the process may result in the complainant giving up before the problem has been resolved.

A complaint can be defined as follows: Any expression of dissatisfaction, whether oral or written, and whether justified or not, from or on behalf of an eligible complainant about the provider’s provision of, or failure to provide, a financial service.

The bottom line is that if your customer expresses dissatisfaction verbally or in writing then you need to put things right. If you can do this as soon as possible, you – and your customers – have everything to gain.

Resolving complaints quickly will –

  • Ensure a happier customer, leading to improved customer loyalty.
  • Offers you the chance to examine and put right weaknesses in your service early on, reducing future similar complaints.

Financial services providers are required to develop an easily comprehensible internal resolution policy that is easily accessible by customers. Customers must be made aware in writing of the availability of the internal resolution policy at or immediately after the point of sale (this may be in the initial disclosure document).

The policy should contain the following technical procedures:

  • Definition of what constitutes a complaints – oral or written – and examples of what does not.
  • Confirmation of who in the company is assigned to deal with complaints and how complaints are passed to them; the person must have the necessary competency.
  • Confirmation of the procedure to refer the complaint to a third party for example where the fault lies with the funeral broker.
  • Confirmation of how/when/to whom the complaint handler should report complaints internally and make recommendations for revised practice where appropriate.
  • A summary of key steps to take to investigate a complaint.

The following are the practical steps that need to be taken to handle a complaint that will ensure that the TCF requirements in terms of complaints are met:

  • Assist the customer to put the complaint in writing, where it has been made orally.
  • Forward the complaint to the correct department as soon as possible.
  • Provide a written acknowledgement of the complaint which includes the details of the complaint handler. The Code of Conduct sets a limit of three weeks; but the company can set their own standard.
  • The acknowledgement must include a written summary of the complaint’s procedure.
  • The complaints handler must follow the following steps to investigate the complaint:
  • Review the advice records or any other relevant facts.
  • Speak to the relevant broker or other individuals.
  • Record the rationale for your decision and any recommendation in writing.
  • If change or improvements are required, mark this for action and inform the relevant department or manager. This can be done by completing a Recommendation following complaint (RFC) form.
  • It is encouraged to use the phone to keep customers informed of progress or any delays and, where possible, to record the conversation.
  • Keep copies of correspondence and notes from telephone conversations and keep this on the file for each complaint.
  • Provide the complainant with a response and reasons for your decision with evidence where applicable; this also applies if the response was favourable. The timeline limit set by the Code of Conduct is six weeks. The provider can set their own limits regarding this.
  • The response must also detail the customer’s right to refer the complaint to the relevant Ombud’s scheme within six months of the response. The details of the applicable Ombud’s schemes must be included in the response.
  • Log the complaint by date, nature, name, whether or not considered justified and confirmation of response dates and outcomes.

Financial services providers should investigate the underlying causes of complaints and take action to eliminate the root cause.

It is advisable for financial services providers to benchmark their complaints handling against the competitors.

The areas that can be benchmarked may include the following:

  • Complaint volumes
  • Resolutions rates
  • Referrals to Ombud schemes
  • Root causes