Upheld: Other regulated complaint complaint against U Drive Cover Limited

Decision detail

Summary

Mr H complained that U Drive Cover Ltd failed to refund the correct amount when he cancelled his motor insurance policy. Mr H took out a policy in December 2018 but provided incorrect information about his driving licence date and penalty points, resulting in premium increases totalling £274.13 that he refused to pay. Mr H requested cancellation but U Drive demanded payment and later instructed debt collectors. The ombudsman found Mr H was entitled to cancel under the Consumer Insurance Act 2012 following the misrepresentation, and that his deposit of £162.83 covered the time on risk plus U Drive's setup fee, leaving no amount owed. U Drive was ordered to write off the debt, terminate debt collection, and pay £50 compensation.

The Ombudsman's reasoning

The ombudsman found that Mr H made a qualifying misrepresentation under the Consumer Insurance (Disclosure and Representations) Act 2012, which entitled him to cancel his policy rather than pay increased premiums. Mr H clearly expressed his unwillingness to pay premium increases from the outset. The ombudsman determined that Mr H's deposit of £162.83 effectively covered the 'time on risk' cost (£107.56) plus U Drive's reasonable setup fee (£55), totalling £162.56, leaving no further amount owed. The ombudsman rejected U Drive's imposition of amendment fees and found it unreasonable to instruct debt collectors to recover amounts Mr H did not owe, causing him trouble and upset.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website