Not upheld: alleged fraud in insurance application and unfair recording on fraud register complaint against Lemonade Insurance N.V

Decision detail

Summary

Mr G complained that Lemonade unfairly recorded his details on the Insurance Fraud Register after retrospectively cancelling his home insurance policy from inception. Mr G had requested cover for a high-value mountain bike (£2,400) and provided an invoice with an AI-generated watermark, a photo matching an eBay listing, and a manufacturer's website screenshot. When Lemonade raised concerns, Mr G explained the documents related to his child's school project and were sent by mistake. Mr G subsequently provided a photo of a different, lower-value bike (£1,000) but no original purchase evidence. The ombudsman did not uphold the complaint, finding Lemonade's concerns about the false documentation were reasonable and its decision to apply fraud terms and register Mr G on the IFR was fair, as providing false information to insure a high-value item suggests intent to claim fraudulently.

The Ombudsman's reasoning

The ombudsman found that Lemonade's concerns about the evidence provided were reasonable and justified seeking clarification. The provision of false information (AI-generated invoice, photo matching eBay listing) combined with Mr G's inability to subsequently demonstrate ownership of the claimed £2,400 bike constituted fraud under the policy terms. The ombudsman reasoned that there would be no logical reason to insure a high-value item one doesn't own unless intending to claim for it, giving Lemonade legitimate concerns. The absence of a claim does not prevent an insurer from taking action where false information has been provided. The ombudsman concluded Lemonade acted fairly in applying the Fraud terms and recording details on the IFR.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website