Upheld: General financial advice complaint against AutoProtect (MBI) Ltd
Financial Ombudsman decision DRN-4203016 of 2023-07-04T00:00:00+00:00. General financial advice complaint against AutoProtect (MBI) Ltd. Outcome: Upheld.
Decision detail
| Reference | DRN-4203016 |
|---|---|
| Decision date | 2023-07-04T00:00:00+00:00 |
| Firm | AutoProtect (MBI) Ltd |
| Product | GAP / warranty insurance |
| Claim type | General financial advice |
| Outcome | Upheld |
| Remedy | AutoProtect (MBI) Ltd must refund Mrs W £598 (£299 for 2021 premium and £299 for 2022 premium) plus 8% simple interest per year from the date each premium was paid until the date of payment. If income tax is required to be deducted from the interest, AutoProtect must inform Mrs W and provide a certificate if requested. |
Summary
Mrs W purchased a mechanical breakdown insurance policy from AutoProtect in 2021 and renewed it in 2022, both times when her car was over 6 years old and had more than 60,000 miles. When she made a claim in December 2022 for a car fault, the insurer declined it citing wear and tear exclusion, which applied to vehicles meeting her car's age and mileage criteria. Mrs W complained that the policy was mis-sold as it was never going to provide meaningful cover for her situation. The ombudsman upheld the complaint, finding that AutoProtect failed to provide suitable advice in both the initial sale and renewal, and ordered a full refund of premiums (£598) plus 8% simple interest.
The Ombudsman's reasoning
The ombudsman found that AutoProtect failed to provide suitable advice in both 2021 and 2022 because Mrs W's car was already over 6 years old and had more than 60,000 miles when the policy was sold, meaning the wear and tear exclusion would have severely limited her ability to make claims. As an advised sale, AutoProtect was required to ensure the policy was suitable for her circumstances. The ombudsman was persuaded by Mrs W's testimony that she would not have purchased the policy had she been given proper advice about this significant limitation.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| AutoProtect (MBI) Ltd, all decisions | 5 | 20% |
| General financial advice, all decisions | 4,578 | 36% |
| GAP / warranty insurance, all decisions | 915 | 39% |
Source
Read the original decision on the Financial Ombudsman Service website