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HomeSourcestelegraph.co.ukDirect Line to pay out £30m after overcharging loyal customers

Direct Line to pay out £30m after overcharging loyal customers

Insurance giant admits error but denies subjecting existing customers to ‘loyalty penalty’

Direct Line has agreed to pay £30m to customers who were overcharged when they renewed their home or car insurance, following intervention from the City watchdog.

The insurer admitted to an “error” in implementing the Financial Conduct Authority’s new pricing rules which came into effect from the start of 2022.

It meant that existing insurance customers were charged more for their renewal than they would have been if they were new customers.

Direct Line denied the overcharging was a form of “loyalty penalty”, and said it had made an “error in the implementation of the rules” that meant customers paid a higher renewal price than they should have.

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