Not upheld: failure to notify of material policy enhancement; provision of incorrect information complaint against The Prudential Assurance Company Limited (administered by Vitality from November 2014)

Decision detail

Summary

Mrs S complained that Vitality failed to notify her that the Optimiser feature could be added to her whole of life insurance plan when it became available in January 2018, resulting in overpaid premiums. She sought retrospective application of the Optimiser from 2018 and refunds for 2020-2022. Vitality had already refunded premiums from January 2023 and paid compensation after providing incorrect information in 2023. The ombudsman declined to uphold the complaint, finding that while Vitality should have notified Mrs S of the Optimiser, Mrs S's actual engagement history with the Vitality rewards programme (minimal activity from 2018-2022) did not support the conclusion that she would have engaged sufficiently to achieve materially lower premiums had she been properly notified. The ombudsman rejected the investigator's reasoning that Mrs S's rapid achievement of Platinum status in 2023 demonstrated she would have done the same earlier, finding instead that this reflected changed circumstances in 2023. Awarding retrospective redress would require substituting Mrs S's actual behaviour with a hypothetical best-case reconstruction, which the ombudsman found inappropriate.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities test to determine whether Mrs S would have opted into the Optimiser in 2018 and subsequently engaged with the Vitality programme to achieve materially lower premiums. The key finding was that Mrs S's actual contemporaneous engagement history (26 points in 2017/18, 3 points in 2018/19, zero points 2019-2022) did not support the conclusion that she would have consistently engaged with the programme from 2018 onwards. While Mrs S claims she was physically active during this period, Vitality's scheme requires real-time recording and syncing of activity to earn points, and there was no evidence she attempted this prior to 2023. The ombudsman rejected the investigator's reasoning that Mrs S's rapid achievement of Platinum status in 2023 demonstrated she would have done the same earlier with better information, finding instead that this reflected changed circumstances or motivation in 2023 rather than proof of earlier behaviour. The ombudsman concluded that awarding retrospective redress would require substituting Mrs S's actual engagement history with a hypothetical best-case reconstruction, which is not an appropriate application of the balance of probabilities. Vitality's remedial actions addressing the 2023 misinformation were deemed fair and proportionate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website