Not upheld: service quality and handling of ghost brokering investigation complaint against Liverpool Victoria Insurance Company Limited (LV)

Decision detail

Summary

Mr A complained about LV's service when he cancelled a motor insurance policy obtained through ghost brokering. LV investigated the fraud concerns flagged by its systems, and Mr A found the investigation process and accusatory tone of communications distressing. The ombudsman found that LV was obliged to investigate, reasonably sought information to identify the fraudster, and correctly recorded the outcome as ghost brokering rather than fraud. LV's £100 compensation for a specific error (conflicting cancellation communications) was deemed fair and reasonable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that LV was obliged to investigate fraud concerns flagged by its systems regardless of Mr A's cancellation. LV reasonably sought information to identify who provided the false details, and Mr A's inability to initially answer validation questions gave LV legitimate grounds for concern. The ombudsman accepted that LV's communications about fraud implications were necessary to explain its fraud-prevention duties and were in keeping with industry practice and policy terms. LV promptly concluded its investigation and correctly recorded the outcome as ghost brokering rather than fraud, avoiding reputational damage. The £100 compensation for the specific error (conflicting cancellation communications) was fair and reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website