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

Decision detail

Summary

Mr K purchased breakdown cover online on 22 February 2025 for £82.40 while his vehicle was already broken down, then cancelled the same day requesting a full refund. RAC retained £25.00 as a cancellation fee and refunded £57.40. Mr K complained that the retained fee was unfair. The ombudsman found that RAC's sales page displayed clear warnings in bold text advising customers experiencing breakdown to call rather than purchase online, and the £25.00 cancellation fee was prominently displayed in the terms before purchase. Although Mr K's vehicle had broken down, he proceeded with online purchase and confirmed he understood the terms. The ombudsman upheld RAC's right to retain the £25.00 fee as fair and reasonable for administrative work, and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that RAC provided clear and prominent warnings on its sales page advising customers already experiencing breakdown not to proceed online. The cancellation fee of £25.00 was clearly displayed before purchase. Mr K confirmed he had read and understood the terms including the IPID which excluded pre-existing faults. Although Mr K's vehicle had already broken down, he chose to proceed with online purchase rather than call RAC as instructed. The ombudsman considered the £25.00 fee fair and reasonable for the administrative work of setting up and cancelling the cover, and in line with RAC's stated terms.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website