Not upheld: Service failures generally complaint against Somerset Bridge Insurance Services Limited trading as Go Skippy Insurance

Decision detail

Summary

Mr L complained about charges levied by Go Skippy Insurance after he cancelled his motor insurance policy after just 24 days. He was charged a £125.60 arrangement fee and a £75 cancellation fee, resulting in an outstanding balance of £151.39, which exceeded the £80.40 pro-rata premium for the period of cover. Mr L also complained about conflicting information regarding the balance due and threats of debt collection referral. The ombudsman found that the charges were clearly disclosed in Go Skippy's terms and conditions and were fairly applied, as the arrangement fee related to work done at policy inception and the cancellation fee was proportionate. The ombudsman concluded that Go Skippy's offer to waive the £75 cancellation fee was fair and reasonable, and that taking steps to recover the outstanding balance was not unreasonable. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Go Skippy's charges were clearly disclosed in its terms and conditions and were fairly applied. The arrangement fee relates to work carried out at policy inception (setup, documentation, finance arrangement) which would not have been significantly less due to early cancellation. The cancellation fee of £75 was clearly set out in a table in the Terms of Business. The fact that fees exceeded the pro-rata premium reflects the timing of cancellation rather than unfair charging, as fees are fixed while premiums are calculated on a time-on-risk basis. Go Skippy's offer to waive the £75 cancellation fee was reasonable given administrative costs incurred. The different figures communicated were due to discretionary reductions rather than calculation errors. Taking steps to recover the outstanding balance through debt collection threats was not unreasonable given the charges were fairly applied.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website