Not upheld: Account administration errors complaint against Marshmallow Financial Services Ltd

Decision detail

Summary

Mr A purchased a motor insurance policy online on 17 June 2024 but experienced difficulties with biometric ID verification. After the policy incepted on 17 June, Mr A requested cancellation on 19 June with an effective date of 24 June 2024. On 20 June, Mr A requested the cancellation date be changed to 21 June, which Marshmallow refused, stating the cancellation had already been processed and become irreversible. Marshmallow charged £122.01 for time on cover plus a £30 administration fee, refunding £803.65. The ombudsman found Marshmallow acted fairly by applying its policy terms correctly, providing clear information about the permanent nature of cancellations, and charging appropriate fees based on the cancellation date Mr A selected.

The Ombudsman's reasoning

The ombudsman found that Mr A's final webchat comment on 17 June was not a clear cancellation request, and the agent had already left the chat. The policy incepted on 17 June 2024, and Mr A did not request cancellation until 19 June. Marshmallow's terms clearly state that cancellations within the cooling-off period result in a pro-rata refund minus a £30 administration fee. The ombudsman accepted Marshmallow's explanation that cancellations become irreversible after processing due to Motor Insurance Bureau database updates and partner company involvement, making it technically impossible to change the cancellation date from 24 June to 21 June. Mr A was provided with clear information in advance that cancellations cannot be altered once processed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website