Not upheld: unfair charges and interest retention on consumer credit agreement complaint against Hastings Insurance Services Limited trading as Hastings Direct

Decision detail

Summary

Ms G took out a running account credit agreement with Hastings Direct in November 2025 to finance an insurance policy for a car. When the insurer cancelled the policy due to missing information, Hastings Direct charged cancellation fees and interest. Although Hastings Direct waived some fees as a gesture of goodwill, Ms G remained unhappy about the retained fees and interest charges, particularly given the short period of cover and that the cancellation was initiated by the insurer. The ombudsman found that Hastings Direct's terms clearly disclosed the fees, interest calculation method, and that monthly payments would cost more, and therefore the charges were fair and within the agreement terms. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Hastings Direct's credit agreement clearly set out the fees, interest rates, and calculation methods in the terms provided to Ms G. The welcome pack explicitly explained that choosing monthly payments would result in higher total cost due to interest charges. The interest was calculated daily on the outstanding balance as stated in the agreement terms. The arrangement fee was clearly marked as non-refundable. Although the policy was cancelled by the insurer rather than by Ms G, the ombudsman found this did not make it unfair for Hastings Direct to retain fees and charge interest in accordance with the agreed terms.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website