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13 February 2024

FAIRER FINANCE LAUNCHES FAIR VALUE ASSESSMENT TOOL TO HELP TACKLE CONSUMER DUTY

Tuesday 13th February 2024

Fairer Finance has launched a Fair Value Report tool to allow financial service firms to assess
the value offered by their products by benchmarking them against the wider market, showing
how they compare on the comprehensiveness of their product features, the price they charge,
and the service they offer. The tool is ideal for firms who want to ensure they meet the fair value
standards set by the FCA’s Consumer Duty.
The Fairer Finance Fair Value Report tool uses complete and continuously-maintained datasets,
which include every product in the market across a wide range of sectors. This includes various
insurance and banking sectors, such as motor, home and travel insurance as well as current
accounts, savings accounts, personal loans and credit cards. This means that financial service
firms have the most useful and up-to-date information available for assessing the value of their
offerings.
James Daley, managing director of Fairer Finance, the consumer group and ratings
provider, said: “Consumer duty requires that firms prove they are offering fair value - so it’s
more important than ever that companies are clear on how they shape up against their
competitors. Until now, many firms have carried out a cursory and irregular reviews of a handful
of their competitors - but that is unlikely to stand up to scrutiny in the new Consumer Duty
regime.
“Our new fair value tool looks to provide firms an instant view on how they shape up against all
their competitors on product features, service and price. While for those that need to dive
further into the detail, there’s also the ability to do a feature by feature comparison with the
market - or with key competitors.”

Key features of the Fair Value Report tool include:
1. Product feature analysis and benchmarking
● See measures of the depth and breadth of product features, and where firms can
improve.
● Evaluate how a firm’s products compare to those of their competitors.
● Compare products ranked by comprehensiveness.
● See two or more products side-by-side to directly compare every feature.

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2. Price data
● See how a firm’s product compares to the rest of the market on price.
● Quickly identify whether products are over or under-valued relative to their features.

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3. Service quality analysis
● See polling data derived from a twice-yearly survey on 10,000 customers.
● Get insight into how satisfied and trusting providers’ customers are, and what causes
them to be happy and pick their provider.
● Understand how transparent a firm’s customer journeys and terms and conditions/policy
wordings are through unique transparency analysis, and see how to improve.

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4. FCA Consumer Duty compliance
● Identify areas where your products may fall short on fair value.
5. Exportable Reports
● Export reports in excel or pdf that show how your products compare to the market on
comprehensiveness, price and service.
For more information about Fairer Finance or its new Fair Value Report tool, please visit this
page or read this guide.
Notes to editors:
For further information, please contact:
Karen Mignon, KM Comms: karen@kmcomms.co.uk / +44 7766 651327
Louise Ahuja, KM Comms: louise@louisebcomms.co.uk/ +44 7788 676913

About Fairer Finance
Fairer Finance is an independent consumer group and ratings provider whose mission is to help
create a financial services market which is fair for consumers as well as the companies that
serve them.
With a heritage spanning almost a decade, Fairer Finance’s unique and impartial Product
Ratings are simply designed to help consumers make sense of the complex world of financial
products. It rates over 6,000 products spanning over 20 sectors, ranging from bank accounts,
credit cards, car insurance and travel insurance. In addition, its Customer Experience Ratings
are designed to help consumers make more informed decisions based on quality and service
and not just price.

28 November 2023

0% Balance Transfer Credit Cards

Tuesday 28th November 2023

As we approach the festive period which typically sees consumers spend £740 (or 29%) more on average in December1, with over a third using credit or finance options2, new analysis by Fairer Finance has found that 0% APR purchase credit cards are less competitive today than this time last year.

In December 2022, there were seven credit cards that offered a 0% APR introductory period for purchases for 20+ months, with four (NatWest/RBS/Ulster and Barclaycard) offering 24 months. Today, there is just one card that offers 0% for 20+ months (Barclaycard for 21 months). On average, these cards offer just six months at 0% for purchases.

Furthermore, the standard APRs on these credit cards have been creeping up over the last year. The standard APR in December 2022 was 22.9% compared to 24.4% today, but rates can be as high as 34.9% today.

James Daley, managing director of Fairer Finance, the consumer group and ratings provider, said: “In the run-up to Christmas it’s likely we’ll see more people looking to apply for 0% credit cards to help cover the cost of the festive season. Unfortunately, these cards offer less value to consumers than they did a year ago as the number of interest free months has been falling – as a result of rising interest rates and a continued squeeze on household budgets.

“What’s key is that consumers take note of when the 0% period on their card ends - as these cards start to charge very hefty interest rates once the introductory period is over. Standard APRs on 0% purchase cards have been rising steadily for over a decade. The average APR is now 24.4%, with some cards charging as much as 34.9%. At this point, if the balance can’t be paid off in full, transferring it to a 0% balance transfer card will be far less costly, at least in the short to medium term.

“High, and rising, standard APRs on these cards may soon face scrutiny by the regulator as all firms are now obliged to prove they are offering fair value to their customers. While those who play the game and move their balances from offer to offer can get excellent value for money – credit cards are a very expensive way to borrow if you’re not benefiting from a promotional rate. It’s these – often more vulnerable customers – who contribute the greatest amount to card company profits. This is an inconvenient truth which firms are likely to struggle to justify in the face of the FCA’s new Consumer Duty.”

Notes to editors:

1Source: Bank of England - https://www.bankofengland.co.uk/explainers/how-much-do-we-spend-at-christmas

2 Source: John Lewis - https://www.mirror.co.uk/money/personal-finance/top-christmas-credit-card-purchases-31523176

For further information, please contact:

Karen Mignon, KM Comms: karen@kmcomms.co.uk / +44 7766 651327

Louise Ahuja, KM Comms: louise@louisebcomms.co.uk/ +44 7788 676913

About Fairer Finance

Fairer Finance is an independent consumer group and ratings provider whose mission is to help create a financial services market which is fair for consumers as well as the companies that serve them.

With a heritage spanning almost a decade, Fairer Finance’s unique and impartial Product Ratings are simply designed to help consumers make sense of the complex world of financial products. It rates over 6,000 products spanning over 20 sectors, ranging from bank accounts, credit cards, car insurance and travel insurance. In addition, its Customer Experience Ratings are designed to help consumers make more informed decisions based on quality and service and not just price.

7 November 2023

Fairer Finance Launches New PMI Product Ratings

7th November 2023

FAIRER FINANCE LAUNCHES NEW PMI PRODUCT RATINGS

Consumer group and ratings provider, Fairer Finance, has launched its new PMI product ratings this week - https://www.fairerfinance.com/ratings/product-ratings/private-medical-insurance#5stars.

The ratings are deigned to help consumers chose a good quality product. Fairer Finance award a 5-star rating to the products with a set of features that most customers will need and expect. It sets a high bar so the ratings have real value - no more than 15% are awarded 5-star ratings at the start of each year, and often far fewer.

The policies that have been awarded a 5-star rating are AXA Health For You, AXA Personal Health, Bupa By You Comprehensive, The Exeter Health+ and Vitality Personal Healthcare. Here’s a link to a short blog they’ve written on this which tells you more - https://www.fairerfinance.com/insights/blog/our-new-private-medical-insurance-product-ratings?token=aV5lNuRsO0R8DBED%7EI75_97Vw_ZVZdRY

James Daley, managing director of consumer group and ratings provider, Fairer Finance, said: “The private medical insurance market has been growing rapidly in recent months, as more people have decided to hedge their healthcare as the NHS continues to struggle. Although this is a great opportunity for the industry, it’s also a dangerous moment for consumers - most of whom have never bought this insurance before and are unlikely to understand the nuances of what is and isn’t covered.

“Our new product ratings are designed to help people understand the significant differences between the products on the market - so they can make an informed decision about who they sign up with. Some PMI policies offer poor hospital coverage for certain parts of the country, whilst others have key exclusions around treatments for mental health or cancer. It’s important the PMI market seizes this opportunity responsibly and works harder to explain both the benefits and limitations of their products to customers when they are applying as well as throughout the lifetime of the policy."

For more information about Fairer Finance and to read more about its Customer Experience and Product Ratings, visit https://www.fairerfinance.com/.

About Fairer Finance

Fairer Finance is an independent consumer group and ratings provider whose mission is to help create a financial services market which is fair for consumers as well as the companies that serve them. With a heritage spanning almost a decade, Fairer Finance’s unique and impartial Product Ratings are simply designed to help consumers make sense of the complex world of financial products. It rates over 6,000 products spanning over 20 sectors, ranging from bank accounts, credit cards, car insurance and travel insurance.

Its Customer Experience Ratings are designed to help consumers make more informed decisions based on quality and service and not just price (eg trust, complaint-handling, transparency etc).

6 November 2023

TRUST IN BANKING BEGINS TO LEVEL OUT AFTER AN 8 YEAR HIGH, AS NEW INDEX FINDS CHALLENGER BANKS ARE MOST TRUSTED BY CONSUMERS

For immediate release - Monday 6th November 2023

TRUST IN BANKING BEGINS TO LEVEL OUT AFTER AN 8 YEAR HIGH, AS NEW INDEX FINDS CHALLENGER BANKS ARE MOST TRUSTED BY CONSUMERS

• Fairer Finance Trust in Banking Index reveals insights from a poll of 10,000 consumers

• The percentage of NatWest customers saying they don’t trust NatWest rose from 3.76% to 5.27% between February and August 2023 - moving down the ranks as Farage scandal hits the headlines

• Challengers, Monzo and Starling Bank, are praised by consumers for their app & website and for “helping them budget”

• Savings and current accounts have proven to be the most trusted banking sectors, followed by credit cards, with personal loans and mortgages lagging behind

• Distrust of mortgage providers has risen over the course of 2023

Fairer Finance Trust in Banking Index has found an increase in the number of customers saying they don’t trust NatWest in 2023. The percentage of NatWest customers saying they strongly disagree or disagree that they trust NatWest rose from 3.76% to 5.27% between February and August 2023. This means that NatWest now has more distrusting customers than average (4.23%). The top reasons given by NatWest customers for being unhappy were poor customer service (47%), a lack of local branches (47%) and poor rewards and benefits (43%). One in 10 (11%) of dissatisfied respondents said they were unhappy because they had heard bad stories about NatWest in the news or in social media, a large increase on the 3% of unhappy customers who gave this response in February 2023 – potentially a result of the Nigel Farage debanking headlines during this period.

Tracking 10,000 consumers’ views twice yearly, Fairer Finance has found that trust in the banking sector is at its highest point since it started its Trust in Banking Index eight years ago.

On average 80% of respondents strongly agreed or agreed that they trusted their provider across current accounts, credit cards, mortgages, personal loans and savings accounts. This is a major improvement compared to 2015, when only 65% said they trusted their provider. However, this upward trend has started to level out in the last six months and could start to head downwards in the year ahead as interest rates on mortgages rise and consumers’ budgets are squeezed by the rising cost of living.


CHASM REMAINS BETWEEN TRUST LEVELS FOR CHALLENGER VS TRADITIONAL BANKS

Challenger banks, notably Monzo and Starling, are the most trusted by consumers, compared to traditional banks. The table below shows the trust levels in large banks and building societies in August 2023* - Starling and Monzo have close to 60% of customers strongly agreeing that they trust them. HSBC, TSB and RBS - all more established high street banks - have around 30% of customers giving this response.


Of the challenger banks that came out top, consumers cited Starling Bank and Monzo’s app and website as a key reason for being happy with them (75% and 65% respectively vs an industry average of 51%), while “helping them budget” was another important reason for their satisfaction (24% and 39% respectively, vs 15% industry average).

James Daley, Managing Director at Fairer Finance, the consumer group and ratings provider, commented: “Trust in the banking sector has been on a slow road to recovery over the last 15 years. Mis-selling scandals and the credit crunch drove trust in the sector to all time lows in the early part of the millennium. But better regulation and a more competitive sector has seen a steady improvement in recent years.

“However, it’s likely that we are now at the peak, with sky high mortgage rates and rising repossessions starting to have a negative impact on customer perceptions of the sector. There’s also a widening split between perceptions of the new batch of challenger banks and the established high street brands, meaning the big five will need to continue to work harder to stop losing market share. Nationwide, the UK’s largest building society, is the only brand to be bucking this trend – with its customer trust scores well ahead of any other brand with a high street presence.

“The Farage scandal shows how easy it is to undermine trust in your brand. It takes years of good behaviour and investment in technology and service to build customer trust – but only seconds to undermine it with a bad decision.”

DISTRUST OF MORTGAGE PROVIDERS IS RISING

Among the core products offered by banks, mortgages and personal loans are the least trusted by consumers, followed by credit cards, while savings accounts and current accounts are the most trusted.

Three in four (77%) of respondents said they strongly agreed or agreed that they trusted their mortgage provider (level with February 2023), while 4.5% said they disagreed or strongly disagreed that they trusted their mortgage provider (up from 4.3% in February). This compares with an average of 80% who trust and 4.0% who distrust their banking provider more broadly (the average for current accounts, credit cards, mortgages, personal loans and savings accounts).

This fall in trust in mortgage providers over the course of 2023 is likely a result of the recent rises in mortgage rates, arrears and the cost of borrowing.

Of the large banks and building societies* First Direct and Nationwide are rated most trusted among consumers for mortgages, with 56% and 43% of respondents saying they ‘strongly agree’ that they trust those respectively. Of the large providers, Leeds Building Society and Virgin Money are relatively behind on trust, with 22% and 26% of their respondents saying they ‘strongly agree’ that they trust them.


Daley continued: “Our ratings are designed to help people make more informed decisions based on quality and service, and not just price. Tracking the views of over 10,000 consumers every six months, allows us to see which providers and which sectors specifically are serving customers well and which are not. With the introduction of Consumer Duty, those companies at the bottom of the trust tables need to urgently up their game.”

For more information about Fairer Finance and to read more about its Customer Experience and Product Ratings, visit https://www.fairerfinance.com/.

ENDS

Notes to editors

For further information, please contact:

Karen Mignon, KM Comms: karen@kmcomms.co.uk / +44 7766 651327

Louise Ahuja, KM Comms: louise@louisebcomms.co.uk/ +44 7788 676913

Every six months, Fairer Finance polls around 10,000 banking customers via Opinium to ask them "Based on everything you know about this provider, to what extent would you agree or disagree with the following statement - 'I trust [name of provider]'?". Respondents answer once for every type of banking product they're responsible for buying. The question has the following options: "strongly agree", "agree", "neither agree nor disagree", “disagree” and "strongly disagree".

The percentages for each Spring and Autumn period include responses for the last six waves of the survey.

* Banks with a sample size lower than 150 are excluded from the chart.

About Fairer Finance

Fairer Finance is an independent consumer group and ratings provider whose mission is to help create a financial services market which is fair for consumers as well as the companies that serve them. With a heritage spanning almost a decade, Fairer Finance’s unique and impartial Product Ratings are simply designed to help consumers make sense of the complex world of financial products. It rates over 6,000 products spanning over 20 sectors, ranging from bank accounts, credit cards, car insurance and travel insurance.

Its Customer Experience Ratings are designed to help consumers make more informed decisions based on quality and service and not just price (eg trust, complaint-handling, transparency etc).

25 September 2023

Fairer Finance enhances strategic focus with high profile appointment to lead behavioural economics and data science team

Tim Hogg takes helm to augment the industry's grasp of the Consumer Duty, leveraging a decade of behavioural science and regulatory expertise

12 September 2023

0% Balance Transfer Credit cards

Fairer Finance warns 0% balance transfer deals on credit cards have been getting steadily worse since the second half of 2022

31 July 2023

Comment on Consumer Duty

James Daley, Managing Director at Fairer Finance, the consumer group and ratings provider, commented: “The introduction of the Consumer Duty is the beginning of a whole new era for financial regulation - and represents a significant raising of the bar in terms of how firms are expected to act.

11 July 2023

James Daley comments on the reforming of the Consumer Credit Act 1974

James Daley, Managing Director of Fairer Finance, the consumer group and ratings provider, comments on the Treasury’s consultation response to reforming the Consumer Credit Act 1974:

5 July 2023

Travel Insurance is Least Trusted Sector of General Insurance

  • New Fairer Finance Trust in Insurance Index reveals insights from a poll of 10,000 consumers
  • Car (56.3) and pet (55.7) insurance have proven to be the most trusted sectors since 2020, followed by home insurance (54.5), with travel insurance (50.9) lagging behind
  • Santander is most trusted for travel insurance, followed by M&S, Post Office, Saga and Aviva
  • Correlation between stagnating consumer trust in travel insurance and rise in proportion of complaints upheld by the Financial Ombudsman Service (FOS)

18 January 2023

Walter Merricks and Caroline Barr join Fairer Finance's Consumer Advisory Board, as Sue Lewis takes over as Chair

Two new additions to Fairer Finance's advisory board, as Pester and Thoresen stand down