Not upheld: lack of awareness of credit agreement and informed consent complaint against First Central Insurance Management Limited

Decision detail

Summary

Mr M complained that he was unaware he had entered into a fixed sum loan agreement with FCIM when renewing his car insurance in May 2025, claiming he only agreed to make manual monthly payments. The investigator upheld the complaint, finding FCIM failed to ensure Mr M understood the agreement terms. However, the ombudsman reviewed the phone call recording and found that FCIM had communicated the essential credit terms including the loan nature, monthly amount, term, total payable, cost of credit, and APR. The ombudsman concluded Mr M was aware he was entering into credit and agreed to the terms, and therefore was responsible for the outstanding balance owed for the period the insurance was active.

The Ombudsman's reasoning

The ombudsman reviewed the phone call recording and found that FCIM made Mr M aware of the key terms of the credit agreement, including the monthly payment amount, term, total payable, cost of credit, interest-bearing nature, and APR. Although the specific type of borrowing (fixed sum loan) was not explicitly mentioned, the term 'loan' was used and Mr M was informed he could view the credit agreement online. At the end of the call, Mr M was asked if he wanted details repeated and agreed to the terms. The ombudsman concluded that Mr M would have been aware he was taking out credit and understood the key terms. Regarding the outstanding balance, the ombudsman found it reasonable that Mr M is responsible for paying for the time the insurance policy was on risk.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website