Consumer group Fairer Finance calls on banks and insurers to spare their customers the small print

21st April 2014


Consumer group Fairer Finance has launched a campaign – Spare us the small print – to tackle the incomprehensible terms and conditions and policy documents produced by banks and insurers.

According to a new survey of more than 2,000 consumers by Fairer Finance, only 27% of people claim that they read terms and conditions and policy documents in full, while of those who are brave enough to read the small print, just 17% said that they understand it.

Some 73% of those who don’t read all of their policy documents or Ts & Cs blamed it on the fact that they were too long – something that is borne out by Fairer Finance’s research into the banking and insurance sector.

As part of its transparency ratings, Fairer Finance counted the number of words in the Ts & Cs and policy documents of all the major banks and insurers.

Of the UK’s largest banks, HSBC topped the table with terms and conditions for its bank account coming in at just over 34,000 words – almost 5,000 words longer than John Steinbeck’s Of Mice and Men. Norwich & Peterborough Building Society, Metro Bank, Natwest and Halifax also all came in at more than 25,000 words – over twice the length of Nationwide’s bank account terms and conditions, the shortest in the sector at just over 11,000 words.

In car insurance, Endsleigh, Sheila’s Wheels, Esure and M&S Bank all have policy documents of over 30,000 words – longer than George Orwell’s Animal Farm. At 37,676 words, Endsleigh’s is the longest in the sector, and is just a few hundred words shy of Joseph Conrad’s Heart of Darkness. They are put to shame by LV, who do the same job in 6,901 words.

James Daley, founder and managing director of Fairer Finance, says: “If next to no one is reading terms and conditions, and even those who do are struggling to understand them, then what exactly is the point of these documents? Of course it’s important that customers know what’s covered and what isn’t in their insurance policy, but if one company can do the job in less than 7,000 words, there’s no excuse for insurers who are producing documents that are five times as long.

“As a first step, we want all banks and insurers to take the legalese and jargon out of their small print, and to lay out the documents in a way that’s accessible and doesn’t turn off customers before they’ve started. But in the long-run, the industry needs to have a rethink about what information it needs to get across to its customers, and what’s the best way to do that. Too often, compliance managers and lawyers talk banks and insurers into throwing the kitchen sink into these documents, which reduces the chance of the small print ever being read.

“We’re encouraged to see that the Financial Conduct Authority recently cited terms and conditions as an area of potential detriment for consumers. Let’s hope that it’s up to the challenge of solving this problem and getting banks and insurers to be more transparent.”

Fairer Finance’s survey was carried out by independent insight agency Opinium in March 2014 and went to a sample of 2,004 UK consumers.Longest terms and conditions of banks rated by Fairer Finance

HSBC 34162
Norwich & Peterborough BS 28561
Metrobank 26392

Shortest terms and conditions of banks rated by Fairer Finance

Nationwide 11068
Smile 11983
Co-op bank 12491

Longest car insurance policy documents of insurers rated by Fairer Finance

Endsleigh 37674
Sheila’s Wheels 32860
Esure 32631

Shortest car insurance policy documents of insurers rated by Fairer Finance

LV 6901
Nationwide 9302
First Direct 9710

For comparison, the word count on some great works of 20th and 19th century literature
Turn of the Screw – Henry James – 42, 211 words
Heart of Darkness – Joseph Conrad – 38,098 words
Animal Farm – George Orwell – 29,966 words
Of Mice and Men – John Steinbeck – 29,160 words
Old Man and the Sea – Ernest Hemingway – 26,560 words

Leave a Reply

Your email address will not be published. Required fields are marked *