Not upheld: direct debit cancellation and service failure in investigation complaint against Allied Irish Banks Plc

Decision detail

Summary

Mr F complained that AIB incorrectly cancelled his car insurance direct debit, resulting in his wife driving uninsured for two days with their grandchildren. AIB initially claimed responsibility but later stated the insurance provider caused the issue by sending two zeroised mandates. The ombudsman found AIB's investigation was unreasonable and the explanations inconsistent, but determined Mr F suffered no financial loss as he obtained replacement insurance at a lower premium the next day. No evidence supported claims of credit file damage or late fees. The ombudsman upheld AIB's offer of £150 compensation as reasonable recognition of the inconvenience and service failure, rejecting Mr F's claim for £790.

The Ombudsman's reasoning

The ombudsman found that whilst AIB failed to investigate the matter reasonably and provided inconsistent explanations, Mr F did not suffer financial loss. The statements showed regular payments were made each month until the policy was cancelled, and Mr F was able to obtain new insurance at a lower premium the next day. Although Mr F experienced a two-day period without cover and emotional distress at discovering his wife had driven uninsured with grandchildren, the ombudsman's role is to consider what actually happened rather than hypothetical scenarios. No evidence supported claims of late fees or credit file damage. The £150 compensation was deemed reasonable to acknowledge the inconvenience and service failure.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website