Not upheld: Investment mis-selling complaint against QBE Europe SA/NV

Decision detail

Summary

R, a company, purchased two trade credit insurance policies from QBE to cover invoices owed by company N. When N failed to pay and proved not to be insolvent, bankrupt or in a company voluntary arrangement, R could not claim under the policies. R complained that QBE mis-sold the policies by not clearly disclosing the legal costs that might be involved in pursuing recovery and the high fees relative to the invoice values. The ombudsman found that QBE's sales process adequately disclosed that cover only applied to insolvency-related non-payment, that legal costs were not mandatory, and that R had sufficient information to assess policy suitability. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that QBE sold the policy on a non-advised basis and therefore had a duty to provide clear, fair and not misleading information. The sales process made it clear that the policy only covers non-payment due to insolvency, bankruptcy or company voluntary arrangement. The IPID and Policy Schedule adequately disclosed the key terms. Legal costs were not a requirement for obtaining cover, and R was not obligated to use Z as its solicitor. The ombudsman concluded that QBE provided sufficient information to enable R to decide if the policy was suitable, and therefore did not act unreasonably in selling the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website