Partially upheld: administrative error and failure to promptly correct records complaint against Watford Insurance Company Europe Limited

Decision detail

Summary

Mr S and Mrs Z complained that Watford Insurance made an administrative error by registering their car on the Motor Insurers Anti-Fraud and Theft Register as scrapped, which prevented them from selling it through firm B and caused distress. Watford corrected the error immediately upon notification but could not control how quickly other organisations updated their records. Mr S claimed losses including a £1,200 car sale loss, impact on a potential house purchase, and public transport costs. The ombudsman upheld the complaint in part, requiring Watford to pay £300 compensation for distress and inconvenience, but rejected claims for financial losses as either speculative or resulting from Mr S's own decision not to drive the car.

The Ombudsman's reasoning

The ombudsman found that Watford acted reasonably by correcting the error promptly upon notification and could not control how quickly other organisations updated their records. While sympathising with the distress caused, the ombudsman rejected claims for financial losses (car sale loss, property purchase impact) as speculative and not causally linked to Watford's error, since Mr S had not agreed a sale price and had not found a suitable property. The ombudsman also rejected transport costs and additional insurance costs, finding that Mr S's decision not to drive the car was his own choice, as Watford had not advised against driving it and would have had a duty to do so if necessary. The ombudsman considered £300 compensation appropriate for the distress and inconvenience caused.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website