In the recent case of Figurasin & Anor v Central Capital Limited, the Court of Appeal has clarified whether written documents can remedy an earlier misleading telephone call.
ICOB 2.2.3R (now ICOBS 2.2.2R) provides that a firm must take reasonable steps to communicate to customers in a way that is clear, fair and not misleading. In this case, a customer account manager of the broker failed to make clear in a telephone call the additional cost involved in taking out a PPI policy. However, the subsequent written documentation was found to be clear, fair and not misleading and contained all the necessary details of the additional cost.
The customers did not read these documents fully and the broker argued that they should have done so because they would have disclosed the full cost of the PPI to them. The Court of Appeal rejected this, saying that the misleading telephone call caused the customers not to read the detail of the documents. The documents were not sufficient to remedy the defects in the telephone call.
The lesson of the case is that each and every communication needs to be clear, fair and not misleading, not just the written documents. Telephone scripts need to be legally vetted and call staff trained to ensure that customers are given all of the necessary details to enable them to understand and assess the features and cost of the policy.