Not upheld: Other regulated complaint complaint against RAC FINANCIAL SERVICES LIMITED

Decision detail

Summary

Mrs P purchased RAC breakdown insurance online on 20 February 2025 with a future start date of 31 March 2025, and cancelled on 27 March 2025. RAC charged a £25 cancellation fee, which Mrs P disputed, claiming she was not advised of the fee before the policy commencement date and that 'joining date' should mean the policy start date rather than the purchase date. The ombudsman found that RAC clearly explained the cancellation fee in the online sales process and policy documents, with the cooling-off period defined as 14 days from the date of purchase. The ombudsman personally tested the online journey and confirmed the information was clearly displayed. The complaint was not upheld as the fee was charged in accordance with the policy terms.

The Ombudsman's reasoning

The ombudsman was satisfied that RAC clearly communicated the £25 cancellation fee during the online sales process under the heading 'What you'll pay if you cancel' and in the policy documents. The ombudsman personally tested the online journey and confirmed the information was displayed consistently regardless of start date. The policy terms clearly defined 'joining' as the date of purchase, not the policy start date, and this was explained in both the cooling-off period information and the policy schedule. The fee was therefore charged in accordance with the terms and was fair.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website