Not upheld: GAP / warranty insurance mis-selling complaint against Wesleyan Financial Services Ltd
Financial Ombudsman decision DRN-3277647 of 2022-09-23T00:00:00+00:00. GAP / warranty insurance mis-selling complaint against Wesleyan Financial Services Ltd. Outcome: Not upheld.
Decision detail
| Reference | DRN-3277647 |
|---|---|
| Decision date | 2022-09-23T00:00:00+00:00 |
| Firm | Wesleyan Financial Services Ltd |
| Product | Pension |
| Claim type | GAP / warranty insurance mis-selling |
| Outcome | Not upheld |
| Remedy | £250 compensation for poor service and loss of expectation. Wesleyan confirmed it would carry out a redress calculation to ensure Mr P did not lose out financially due to delays, which showed Mr P was £299.17 better off than if no delays had occurred. |
Summary
Mr P complained to Wesleyan Financial Services about poor service regarding his two pension plans. In March 2020, a Wesleyan representative incorrectly told Mr P that pension valuations were 'guaranteed' and delayed sending him the necessary forms to take his benefits. When Mr P eventually received the forms in April 2020, the valuations had fallen by over £10,000 and the representative admitted the valuations were not guaranteed. Mr P took benefits from one plan and transferred the other to another provider. Wesleyan upheld the complaint and offered £250 compensation plus a redress calculation. The ombudsman found the £250 offer fair because although Wesleyan gave incorrect information, the valuations were genuinely not guaranteed, and the redress calculation showed Mr P was actually £299.17 better off overall due to offsetting gains and losses in his two funds.
The Ombudsman's reasoning
The ombudsman accepted that Wesleyan provided poor service and gave incorrect information about valuations being guaranteed, causing Mr P loss of expectation. However, the ombudsman found that requiring Wesleyan to honour the March 2020 valuations would be unfair because those valuations were genuinely not guaranteed and there was no mechanism to guarantee them. The ombudsman considered the redress calculation reasonable, using 1 April 2020 as the date (ten working days after the request) as a fair assumption for when forms would have been issued and returned if there had been no delay. Since the lower final bonus rate was not applied until 2 April 2020, Mr P was not disadvantaged by this date choice. The calculation showed Mr P was actually £299.17 better off overall due to the increase in the unitised with profits fund offsetting the decrease in the traditional with profits fund. Therefore, the £250 compensation for poor service and loss of expectation was deemed fair.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Wesleyan Financial Services Ltd, all decisions | 35 | 33% |
| GAP / warranty insurance mis-selling, all decisions | 1,189 | 26% |
| Pension, all decisions | 15,579 | 47% |
Source
Read the original decision on the Financial Ombudsman Service website