Not upheld: policy cancellation and fraud marker application following misrepresentation by ghost broker complaint against UK Insurance Limited trading as Churchill (UKI)

Decision detail

Summary

Mr W complained about UKI's cancellation of his motor insurance policy and application of a fraud marker after a ghost broker deliberately misrepresented his details in the application. Mr W acknowledged trusting the ghost broker without proper verification but claimed he had no fraudulent intent. The ombudsman found that Mr W had a responsibility under CIDRA to take reasonable care, and that a reasonable person would have understood the ghost broker was providing false information. Since Mr W did not attempt to correct the misrepresentations and the false information was material to UKI's underwriting decision, the ombudsman concluded UKI acted fairly in relying on the fraud term to cancel the policy and apply the marker. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Mr W had a responsibility under CIDRA to take reasonable care not to make misrepresentations. The ghost broker deliberately misrepresented Mr W's details, and the false information was material to UKI's underwriting decision. The ombudsman concluded that a reasonable person would have understood the ghost broker was providing false information, and Mr W did not attempt to correct or question this. Therefore, it was not unreasonable for UKI to consider the misrepresentation deliberate and fraudulent in nature, and to rely on the fraud term in the policy to cancel and apply the marker.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website