18 January 2016
If your documents include 200 word sentences, you are in breach of FCA rules
You do not need to be a rocket scientist or a brain surgeon to understand or comprehend that lengthy wordy sentences, with multiple clauses, written in legalese - or financial jargon - are much harder or more difficult to make sense of than short, succinct sentences that comprise of around 20 to 30 words, which is the length that most people who are experts in the world of clear, plain English writing would tend to say is about the right length if you're trying to make yourself clearly comprehensible and understood to the audience that you are writing for, be they young or old, educated or not.
That was a 107 word sentence. It's not easy to read. It's not even easy to write. Yet many banks and insurers routinely rely on sentences that are much longer.
That 230 word sentence in full
According to Fairer Finance's latest research, the longest sentence in a banking or insurance document runs to 230 words. You'll find it in Axa's travel insurance document. And in case you missed it in yesterday's Sunday Times - which printed the sentence in full - here it is:
"We will pay you up to the Travel Disruption limit in your policy schedule for your unused travel, accommodation (including excursions) and other pre-paid charges that you cannot claim back from any other source together with any reasonable additional travel and accommodation costs (room only) which are of a similar standard to that of your pre-booked travel and accommodation if you have to: move to other accommodation at any point during your trip as a result of the insolvency of the providers or booking agents, fire, flood, earthquake, explosion, tsunami, landslide, avalanche, hurricane, storm or an outbreak of food poisoning or an infectious disease meaning you cannot use your booked accommodation; or curtail your trip with prior authorisation of the Emergency Assistance Service as a result of the insolvency of the providers or booking agents, fire, flood, earthquake, explosion, volcanic eruption, tsunami, landslide, avalanche, hurricane, storm or an outbreak of food poisoning or an infectious disease meaning you cannot use your booked accommodation and you need to be repatriated to your home; or curtail your trip with prior authorisation of the Emergency Assistance Service as a result of the Travel Advice Unit of the Foreign & Commonwealth Office (FCO) recommending evacuation from the country or specific area you have travelled to providing the advice came into force after you left your home area to commence the trip."
You'd be forgiven if you've grown bored of hearing us bang on about the state of banking and insurance documents. For almost two years now, we've been running our Spare Us the Small Print campaign - drawing attention to the fact that these documents are too long (some are longer than Mark Twain's Adventures of Tom Sawyer). Worse still, most are written in a language that makes no sense to the average person.
Playing the long game
The bad news for those of you with short attention spans is that we're dug in for the long run here. This is a campaign we don't intend to put to rest until banks and insurers are finally talking to their customers in ordinary, intelligible language. Some people think we'll see pigs fly. But we've got reason to be more optimistic.
We're already hard at work trying to improve companies' documents one at a time - and this year will finally see the publication of our first rewritten insurance policy documents. They're still a little longer than we'd like them to be - but from a language and design perspective, we're confident that they're leagues ahead of most insurers. And we're continuing to work with our clients to persuade them to let us cut more words out.
Meanwhile, we're still hopeful that the regulator will do more. If companies are writing 230 word sentences, we believe there's a good case to be made that they are failing to live up to the FCA's rule that communications must be "clear, fair and not misleading". So we need to see the FCA stepping up to publicly challenge, censure and even fine these worst offenders.
Axa says its lengthy sentences are there to protect consumers
Axa's defence in the Sunday Times article was embarrassing. Rather than find some humility and contrition, it decided to come out fighting. It claimed it needs long sentences to ensure customers "don't lose the legal protection these documents provide". That is of course utter hogwash. The consumer protections are written in law and in the FCA rulebook. Axa's lengthy sentences are the result of Axa's lawyers trying to cover off every eventuality - however, remote - between each full stop. They are of course written to protect no one other than Axa.
It was encouraging to see the FCA talking tough over pensions jargon last week, saying that it would be willing to enforce against companies who don't work towards simplifying their documents in that market. But it needs to take that approach across the whole industry. Confusing documents prevail in every corner of banking and insurance. It's time for the regulator to turn its words into actions.
That's the end of this blog post - but just for fun, here are the other 9 worst sentences in our top 10:
John Lewis - Life Insurance (189 words)
"We reserve the right from time to time by giving you 60 days notice, so far as it is practicable to do so, to make such changes or additions to this membership handbook as may reasonably be required to reflect: - any change of law, regulatory requirement or taxation - changes to services relating to your policy supplied to us by third parties which are outside of our control or which require additional expenditure by us - changes in circumstances or the happening of any event which is outside of our control which means that the policy’s terms and conditions operate in a way which is unfair to you or our other members - changes resulting from the introduction of new systems, services, and changes in technology outside of our control - changes in circumstances or the happening of any event which is outside of our control and which makes it impossible, impracticable or economically unviable for us not to make a change to the terms and conditions, provided that any such change is not unfair to you or our other members - changes required to remedy obvious errors."
Admiral - Travel Insurance (174 words)
"Notwithstanding any provision to the contrary within this insurance, or any endorsement thereto, it is agreed that this insurance excludes any loss or expense of whatsoever nature directly or indirectly caused by, resulting from, or in connection with any of the following regardless of any other cause or event contributing concurrently or in any other sequence to the loss: War, hostilities or warlike operations (whether war be declared or not); invasion; act of an enemy foreign to the nationality of the Insured Person or the country in, or over, which the act occurs; civil war; riot; rebellion; insurrection; revolution; overthrow of the legally constituted government; civil commotion assuming the proportions of, or amounting to, an uprising; military or usurped power; explosions of war weapons; release of weapons of mass destruction that do not involve an explosive sequence; murder or assault subsequently proved beyond reasonable doubt to have been the act of agents of a state foreign to the nationality of the Insured Person whether war be declared with that state or not; terrorist activity.”
Halifax - Travel Insurance (159 words)
"The actual or threatened use of force or violence against persons or property, or commission of an act dangerous to human life or property, or commission of an act that interferes with or disrupts an electronic or communications system, undertaken by any person or group, whether or not acting on behalf of or in connection with any organisation, government, power, authority or military force, when any of the following applies: the apparent intent or effect is to intimidate or coerce a government or business, or to disrupt any segment of the economy; the apparent intent or effect is to cause alarm, fright, fear of danger or apprehension of public safety in one or more distinct segments of the general public, or to intimidate or coerce one or more such segments; the reasonably apparent intent or effect is to further political, ideological, religious or cultural objectives, or to express support for (or opposition to) a philosophy, ideology, religion or culture."
RBS - Bank Accounts (150 words)
"Unless you have acted fraudulently, you will not be responsible for any losses which result from: the misuse of your card before it came into your possession; or the misuse of your card after you have told us that it is lost or stolen or that someone else knows your PIN; or someone else using your card or card details without your authority to make a payment where the cardholder does not need to be present, provided that you notify us of such use without undue delay on becoming aware of the misuse; or someone else using your card for a Contactless transaction without your authority, provided that you notify us of such use without undue delay on becoming aware of the misuse; or the unauthorised use of your card where we have not, at any time, provided you with the appropriate means to make notification under General Condition 3."
AA - Car Insurance (150 words)
"Someone who has a current contract for breakdown assistance service with either Automobile Association Developments Limited (trading as AA Breakdown Services) or The Automobile Association Limited (in relation to which any monies due have been paid) under what is known as personal Membership, together with any person who is named as entitled to service from either Automobile Association Developments Limited (trading as AA Breakdown Services) or The Automobile Association Limited, under any such contract. AA Member Someone who has a current contract for breakdown assistance service with either Automobile Association Developments Limited (trading as AA Breakdown Services) or The Automobile Association Limited (in relation to which any monies due have been paid) under what is known as personal Membership, together with any person who is named as entitled to service from either Automobile Association Developments Limited (trading as AA Breakdown Services) or The Automobile Association Limited, under any such contract."
Lloyds - Mortgages (147 words)
"It shall be an obligation on the debtor: where he has received any notice or order, issued or made by virtue of the Town and Country Planning (Scotland) Acts 1947 to 1969 or any amendment thereof, or any proposal so made for the making or issuing of any such notice or order, or any other notice or document affecting or likely to affect the security subjects, to give to the creditor, within fourteen days of the receipt of that notice, order or proposal, full particulars thereof; to take, as soon as practicable, all reasonable or necessary steps to comply with such a notice or order or, as the case may be, duly to object thereto; in the event of the creditor so requiring, to object or to join with the creditor in objecting to any such notice or order or in making representations against any proposal therefor."
Admiral - Car Insurance (132 words)
"All loss, damage, cost or expense of whatsoever nature directly or indirectly caused by, resulting from or in connection with any of the following regardless of any other cause of event contributing concurrently or in any other sequence to the loss: any act of terrorism, war, civil war, invasion, act of foreign enemy, hostilities, or warlike operations (whether war be declared or not) mutiny, civil commotion assuming the proportions of or amounting to a popular rising, military rising, insurrection, rebellion, revolution, military or usurped power, confiscation, nationalisation, requisition or any act of any person acting on behalf or in connection with any organisation with activity directed towards the overthrow by force or its Government de jure or de facto, except so far as to meet the requirement of the Road Traffic Act.’
Natwest - Home Insurance (129 words)
"In carrying out the actions above we may: Use the information we hold in our system about you and that of others named on the policy, for example joint policy holders, Share the information with agencies that carry out certain activities on our behalf, for example those who help us underwrite your policy, Use and share your information with our approved suppliers where this is reasonably required to help deal with your claim or let you benefit from our policyholder services, including with our credit hire providers and legal advisors, Disclose some of your information and that of others named on the policy to other insurers, third party underwriters, reinsurers, credit reference, fraud prevention, regulators and law enforcement agencies and other companies that provide service to us or you."
Esure - Home Insurance (124 words)
"Any loss due to your relative, close business colleague, travel companion or person with whom you had arranged to stay, if at the time of taking out your policy or booking a trip, whichever was the later, had a medical condition for which he or she: was receiving treatment at hospital (other than where they go to hospital for check-ups for a stable condition, at regular intervals which have been arranged beforehand), was waiting for a hospital consultation, investigations or treatment (other than where they go to hospital for check-ups for a stable condition, at regular intervals which have been arranged beforehand), had been given a terminal prognosis, or been told that their condition is likely to get worse in the next 12 months."