Customer had clear information with which to make decision about policy’s suitability

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Customer had clear information with which to make decision about policy’s suitability

Categories:

Insurance policies,

Summary:

In January 2014, Cooper applied for a credit card and chose to add an insurance policy that would cover his repayments if he lost his regular income. The policy was sold by his bank but was operated by a separate insurance company. Later, he took voluntary redundancy and was unable to keep up repayments. He contacted the bank to make an insurance claim. The insurance company declined the claim, leading Cooper to complain the policy had been unsuitable for him and the bank should not have sold it to him. He also complained the bank failed to offer adequate support when he was unable to keep up repayments or let him know his account would be passed to a debt collection agency. Finally, he complained about the length of time taken to consider his claim. The bank looked into his complaints and found it had contacted him on numerous occasions to tell him he was in arrears and that the debt would be passed to a debt collection agency. As for the time taken to consider the claim, the bank said it passed on his claim to the insurance company, which requested further information before reaching a decision. Cooper was unhappy with this response and asked us to investigate.

Published:

November 2024

Our investigation

We investigated the complaint and found Cooper had applied for the insurance policy online and therefore the bank could not have given him any advice or recommendations about the suitability of the policy. Its obligation was confined to offering Cooper clear information so he could decide whether the policy was right for him. We found the information was sufficiently clear. The bank sent correctly addressed letters to him each month advising him he was in arrears and warning himit would pass the debt to a collection agency. It also called Cooper to try to discuss the arrears, but most of the calls went unanswered. Finally, Cooper had an obligation to check his account statements and make monthly repayments.