Upheld: unfair credit hire referral - failure to provide fair, clear and non-misleading information complaint against Saga Services Limited

Decision detail

Summary

Mr B complained to Saga about a credit hire referral made after his car was damaged in a non-fault accident in September 2023. Saga referred the claim to accident management company E on a credit hire basis. In September 2025, when the third party insurer disputed the hire costs and Mr B was asked to attend court, he discovered he had not claimed on his own insurance policy as he believed, but had entered a separate credit hire agreement where he could be liable for E's costs. The ombudsman upheld the complaint, finding that Saga failed to provide fair, clear and non-misleading information about the referral, particularly regarding the potential liability risks. The ombudsman directed Saga to pay £200 compensation and to cover any costs E seeks to recover from Mr B if E cannot recoup them from the third party insurer.

The Ombudsman's reasoning

The ombudsman found that Saga failed to provide fair, clear and non-misleading information as required by FOS standards. While Saga explained the benefits of the credit hire referral (like-for-like car, no excess), they failed to explain the potential negative consequences, crucially that Mr B could be liable for E's costs if the third party insurer did not reimburse them. The call structure was misleading as Saga obtained Mr B's agreement before explaining the separate credit hire agreement. Saga's language suggested they would remain involved in the claim process. The ombudsman rejected Saga's argument that E's documentation would have clarified these matters, as it is not fair or reasonable for a referring business to rely on another company's information. Had Saga acted fairly, Mr B would most likely have made a claim on his own motor insurance policy instead.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website