Not upheld: mis-selling and failure to cancel policy as requested complaint against Usay Business Ltd trading as Usay Compare

Decision detail

Summary

Mr and Mrs C complained that Usay Business Ltd mis-sold them a joint decreasing term assurance (DTA) policy for £170,000 in December 2023, recommending it as a replacement for their separate level term assurance (LTA) policies totalling £130,000 cover. They argued Usay failed to adequately explain the DTA basis, did not send a suitability report before conclusion, and crucially, failed to cancel the DTA policy when Mr C requested this in mid-December 2023. Subsequently, Mr C took out a new LTA policy in January 2024, which was later voided when his claim was declined due to incorrect health question answers. The ombudsman found the original recommendations were suitable and fairly met their mortgage protection needs cost-effectively, and was not persuaded the failure to cancel the DTA policy was causative of Mr C's current position. The ombudsman upheld only the service failure regarding the non-cancellation and deemed the firm's offered £300 compensation appropriate.

The Ombudsman's reasoning

The ombudsman found that Usay gathered reasonable information about Mr and Mrs C's circumstances and needs. The adviser adequately explained the DTA basis and the recommendation was reasonably explained, with Mr C given time to reflect and check his existing policies. The joint DTA recommendation fairly met their objectives of providing full mortgage protection cost-effectively. Although the joint cover was less than their total individual cover, this was appropriate as mortgage repayment is typically based on joint income and only needs to be paid once. The ombudsman was not persuaded that Mr C would have kept his existing policies if the DTA had been cancelled when requested, as he likely would have still taken out the LTA policy when offered. While Usay failed to cancel the DTA policy when requested, this failure was not causative of Mr C's current position.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website