Upheld: incorrect refund processing during cooling-off period complaint against First Central Insurance Management Limited
Financial Ombudsman decision DRN-6241865 of 2026-04-08T00:00:00+00:00. incorrect refund processing during cooling-off period complaint against First Central Insurance Management Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6241865 |
|---|---|
| Decision date | 2026-04-08T00:00:00+00:00 |
| Firm | First Central Insurance Management Limited |
| Product | car insurance |
| Claim type | incorrect refund processing during cooling-off period |
| Outcome | Upheld |
| Remedy | First Central must pay: (1) Total compensation of £100 for distress and inconvenience (£50 already paid, so £50 additional); (2) Interest on £505.16 at 8% simple interest from the date Mr W cancelled the policy to the date he received the refund from his old credit card company; (3) Payment within 28 days with additional 8% simple interest if paid late. First Central to provide tax deduction certificate if required by HMRC. |
Summary
Mr W purchased car insurance from First Central, updating his payment card in August 2025 and using the new card for his September 2025 policy renewal. When he cancelled within the cooling-off period, First Central refunded to his old card from the previous year rather than the new card he had used twice. Although First Central claimed anti-fraud regulations required this, its own cancellation letter had promised refund to the latest card on record. The ombudsman upheld the complaint, finding First Central responsible for the error, and ordered £100 total compensation plus 8% interest on the refund amount from cancellation date to receipt.
The Ombudsman's reasoning
Although First Central's cancellation screen stated it could only refund to the card on record, the ombudsman found it reasonable to assume the card displayed would be the new card Mr W had used twice recently. More significantly, First Central's own written letter to Mr W explicitly stated the refund would go to 'the latest card or bank account we have for you', which was the new card. First Central's claim about anti-fraud rules requiring refund to the original card contradicted its own actions and communications. The ombudsman found First Central's error was not Mr W's responsibility, particularly given the conflicting information provided.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| First Central Insurance Management Limited, all decisions | 64 | 24% |
Source
Read the original decision on the Financial Ombudsman Service website