13th November 2015
Consumers need a post-graduate degree to understand small print on banking and insurance products, a consumer group has said.
Fairer Finance found that a third of all insurance policy documents were written in a language that was only accessible to those who were educated to a university level education.
It looked at the terms and conditions of 280 documents and rated them on a range of reading score formulas.
Despite the high level language used on the forms, around 16% of UK adults have a reading age of 11 or less. In its research, Fairer Finance found that none of the documents would be able to be understood by those with an education level equivalent to an 11-year-old who is in the first year of secondary school.
James Daley, managing director of Fairer Finance, said the banks and insurers were discriminating against customers.
‘By communicating in a language that many people simply can’t understand, banks and insurers are discriminating against large swathes of their customers,’ he said.
‘As well as being unfair, it is also bad business. If customers do not understand what they are buying, they are more likely to be disappointed. It is in everyone’s interests that companies communicate clearly with their customers.’
The Money Advice Service published a report last year that showed four out of five UK adults did not read the full terms and conditions when buying financial products and misunderstanding financial jargon costs consumers £21 billion a year or £428 individually on average.