Not upheld: Other regulated complaint complaint against Marshmallow Financial Services Ltd

Decision detail

Summary

Ms R complained that Marshmallow Financial Services Ltd failed to act on her instruction not to renew her car insurance policy and improperly charged a £125 cancellation fee. Ms R contacted Marshmallow via live chat on 29 November 2024 requesting cancellation but did not provide verification details when requested. The policy renewed on 3 December 2024 and the first payment was collected. Ms R attempted to cancel again on 10 December 2024 but ended the live chat when asked for verification. After Ms R initiated a payment dispute, Marshmallow cancelled the policy on 30 December 2024 for non-payment and charged the cancellation fee plus pro-rata premium. The ombudsman found Marshmallow acted reasonably in requiring verification, properly followed its cancellation process, and was entitled to charge the fees in accordance with the policy terms.

The Ombudsman's reasoning

The ombudsman found that Marshmallow provided clear notice of automatic renewal and reasonable opportunity to cancel before the renewal date. The firm acted appropriately in requiring verification before processing cancellation requests, as this is standard practice to prevent fraud and ensure the customer remains insured. Ms R failed to complete verification on two occasions (29 November and 10 December), so Marshmallow correctly proceeded with renewal and subsequent cancellation for non-payment. The policy terms clearly outlined the £125 cancellation fee and pro-rata premium charges, which were properly applied.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website