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

Mr K complained that Vitality failed to notify him when the Optimiser feature became available for his Whole of Life insurance plan in January 2018, resulting in overpaid premiums. The Optimiser allowed policyholders to reduce premiums by up to 40% through engagement with the Vitality rewards programme. Mr K sought retrospective premium refunds from 2020-2022 and compensation for lost rewards. Vitality had already remedied the 2023 misinformation by adding the Optimiser from January 2023 and refunding premiums from that date plus paying £300 compensation. The ombudsman found that while Vitality should have proactively notified Mr K of this material enhancement, the evidence did not support that Mr K would have opted in and consistently engaged with the programme from 2018 onwards, as his actual engagement history showed minimal activity until 2023. The complaint was not upheld, and Vitality's existing remedial actions were deemed fair and proportionate.

The Ombudsman's reasoning

The ombudsman found that while Vitality should have proactively notified Mr K of the Optimiser as a material enhancement to his policy terms, materiality alone does not justify retrospective premium adjustments. To award redress, the ombudsman required evidence on the balance of probabilities that Mr K would have: (1) opted into the Optimiser when notified, (2) engaged with the Vitality Programme consistently, and (3) achieved and maintained a higher status resulting in materially lower premiums. The evidence showed Mr K had minimal engagement with the Vitality programme from 2012-2022 despite having access to the app and the ability to earn modest discounts. His sudden engagement increase in 2023 following clarification about the Optimiser's benefits does not reliably establish that similar clarity in 2018 would have produced consistent engagement over several years. The ombudsman rejected reconstructing a hypothetical engagement history based on assumptions about best-case scenarios, instead applying the balance of probabilities to actual contemporaneous evidence. Vitality's 2023 remedial actions were deemed fair and proportionate as they addressed the only clear, evidenced error.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website