Isn’t it staggering how idiotic some companies can be when implementing a potentially unpopular policy and then, to compound things further, they handle the resulting disgruntled customer fall-out with all the subtlety of John Prescott at a Jedward concert. Our banking sector occupies a position in the mind of the general public a little north of Satan and, let’s be honest, it’s a reputation they appear to fully and richly deserve.  Whether our banks are the big bad monsters they’re often portrayed as is possibly open to question, but PR is largely about perception and as far banks are concerned most of us view them as huge faceless organisations big on greed and low on anything vaguely resembling good customer service.

The latest financial services institution that really could do with a good slap is Co-operative Insurance. It operates a policy (and, in fairness, it’s not alone in doing so) called “redlining” which basically means it has a list of “banned” postcodes when it comes to offering car insurance.

It – and others – deems certain streets are now uninsurable, presumably because they carry with them a greater risk of theft or vandalism.  I don’t know about you but I sort of thought that was the sodding purpose of taking out insurance in the first place.

I suppose I can understand that if certain streets, certain postcodes are more vulnerable than others then insurance providers need to minimise their losses. So, why not increase premiums? It’s never stopped them across a myriad array of other factors.

BBC Radio 4’s excellent “Money Box” reported last week that a Co-operative Insurance customer informed them he had moved from Exeter to North London – a very nice street in North London according to the programme’s presenter Paul Lewis who had gone to the trouble of looking it up on Google Earth.

The Co-operative told him he was longer covered, as the address to which he had moved was “uninsurable”. They would give him no grace period (not even 24 hours) to source alternative insurance, rendering his vehicle instantly uninsured and leaving him open to prosecution.

But, wait for the best bit. They then informed him he would be charged a £30 admin fee for “cancelling” the policy! Something they later relented on when, no doubt, faced by the “Money Box” team and the prospect of being crucified on-air by the redoubtable Mr Lewis.

The Financial Services Authority says the Co-operative has not treated this customer fairly by failing to give him notice. The Co-operative declined a request from ‘Money Box’ to appear on the programme – hardly surprising given their completely indefensible position.

I always thought the Co-operative was an organisation that held itself to a higher standard when it came to ethics and fairness. Obviously not.

What is especially telling is its sheer stupidity. Fair enough, implement a policy that is in the best interests of your business and, presumably they would say, fairer to customers who shouldn’t be penalised if they live in safer, less crime-susceptible postcodes. But could they not have summoned together a smattering of common sense and given this customer even a couple of hours to find another insurer willing to cover him?

Like bankers, insurance companies have a shabby reputation with the general public.  How many of us suspect they will do their damndest to wriggle out of a claim and, perhaps, more worryingly, how many of us even question the value of having insurance all together?

As customers, all we can do is be as selective and well researched as possible, even if it is a pain. While for those in insurance and banking, there are surely opportunities to be had for those brave enough to steal a march and break the mould of inflexibility, intransigence and sheer pig-headedness that is our financial services sector.


David Leck – Guest Blogger

Posted on 28 May 2012

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