Not upheld: Service failures generally complaint against Collingwood Insurance Services (U.K.) Limited

Decision detail

Summary

Miss B complained to the FOS about a £40 cancellation fee charged by broker CISL when she cancelled her motor insurance policy after passing her driving test. She had expected a refund rather than being charged a fee. CISL defended the charge, stating it was clearly outlined in the policy documentation. The ombudsman did not uphold the complaint, finding that the fee was fair as it was clearly disclosed, the broker incurs legitimate costs in cancelling policies, the charge is in line with industry practice, and Miss B could have cancelled during the cooling off period if unhappy.

The Ombudsman's reasoning

The ombudsman found that while Miss B understandably did not want to pay a cancellation fee, there is a legitimate cost to the broker in cancelling the policy and performing administrative work. The fee was clearly outlined in the policy documentation provided before the policy was taken out, so CISL acted fairly. The ombudsman was satisfied that CISL incurs these costs in dealing with this type of policy and that the fee charged is in line with industry practice. Miss B could have cancelled during the cooling off period if unhappy about the charges.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website