Partially upheld: Service failures generally complaint against Extracover Limited trading as Zego

Financial Ombudsman decision DRN-6440753 of 2026-07-06T00:00:00+00:00. Service failures generally complaint against Extracover Limited trading as Zego. Outcome: Partially upheld.

Decision detail

Reference	DRN-6440753
Decision date	2026-07-06T00:00:00+00:00
Firm	Extracover Limited trading as Zego
Product	Motor insurance
Claim type	Service failures generally
Outcome	Partially upheld
Remedy	Zego must pay Mr M £100 compensation for distress and inconvenience caused by providing an incorrect cancellation reason. Payment must be made within 28 days, with interest at 8% per annum simple if paid later.

Summary

Mr M purchased a telematics motor insurance policy from Zego for £390.03 but cancelled it nine days later after discovering it required an app. Zego refunded £333.56 and stated the cancellation was due to poor driving data, though Mr M had never used the app. The ombudsman found Zego acted fairly in cancelling due to non-use of the app, but the incorrect cancellation reason caused Mr M distress and inconvenience. The complaint was upheld in part, with Zego ordered to pay £100 compensation.

The Ombudsman's reasoning

While Zego acted fairly in cancelling the policy due to non-use of the app (which was a valid contractual reason), it provided Mr M with an incorrect cancellation reason citing poor driving data. Since Mr M never used the app, this reason could not be correct. Although the policy would have been cancelled anyway, the incorrect explanation caused Mr M unnecessary distress and inconvenience. Compensation of £100 is fair and in line with FOS guidelines.

How this compares

Group	Decisions	Uphold rate
Extracover Limited trading as Zego, all decisions	1	50%
Service failures generally, all decisions	34,229	32%
Motor insurance, all decisions	24,148	35%

Source

Read the original decision on the Financial Ombudsman Service website