Partially upheld: unfair policy administration, unclear information provision, unfair cancellation charges complaint against U Drive Cover Limited

Decision detail

Summary

Miss W complained that U Drive Cover Limited unfairly handled her motor insurance policy following a policy amendment that resulted in an increased premium. U Drive informed Miss W the additional premium would incur 20% interest if added to her credit agreement, but her actual agreement rate was 17%. When Miss W cancelled the policy due to dissatisfaction, she was charged approximately £320 including a £75 cancellation fee and a 15% retention of the insurer's refund. The Ombudsman found that while Miss W suffered no financial loss from the interest rate discrepancy, U Drive failed to adequately communicate the 15% retention, which was only mentioned in hyperlinked terms and conditions rather than being clearly highlighted or verbally explained. The complaint was partially upheld and U Drive was directed to waive the 15% retention.

The Ombudsman's reasoning

The Ombudsman found that while U Drive's explanation of the interest charge was unclear, Miss W suffered no financial loss as she was charged the correct rate of 17%. However, the 15% retention of the insurer's refund was a significant consequence that should have been clearly communicated. The Ombudsman distinguished between the cancellation fee, which was explained verbally and thus reasonably understood, and the 15% retention, which was only accessible via a hyperlink without verbal explanation or clear highlighting. This lack of prominence and clarity meant Miss W was not sufficiently informed of the full implications of cancellation when she agreed to the policy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website