In its May/June 2015 issue of Ombudsman News, the Financial Ombudsman Service (FOS) published details of various complaints it had adjudicated on that involved brokers and other ‘middlemen’.

The complaints included:

• A man made an online query about a loan from a broker, and found a few days later he had been charged £79. No loan was ever arranged by the broker. The firm claimed that the existence of the fee was explained in its terms and conditions, and that the complainant had ticked a box on its site to confirm he had read these. The firm was unable to provide confirmation of this to the FOS, nor was it able to provide a copy of the terms and conditions, so the FOS ordered the firm to refund the fee, plus interest at 8%, and to pay an additional £100 to the customer for the distress caused
• A woman also failed to obtain a loan after applying through a credit broker, but had a fee taken from her account which caused her to become overdrawn. The FOS was unable to find any evidence of the firm having made her aware of this fee, and so ordered the firm to refund the fee, plus interest at 8%, and to pay an additional £150 for the distress caused
• When a taxi driver had an accident, his insurer refused to settle the motor insurance claim, saying that the policy was not intended for business use and that it would have declined the application had they known about his intentions. The firm accused the man of withholding information. By listening to a recording of the call, where the insurance was taken out via a broker, the FOS found that he had mentioned his occupation, but the call was subject to a lot of interference. The man had to ask the broker to repeat information several times. Whilst supporting the insurer’s right to void the policy, the FOS got the broker to pay a sum of £150 in compensation, and managed to get the insurer to agree to refund the premiums paid
• A woman was charged a fee by a broker for cancelling her car insurance, and claimed to be unaware of this charge. The broker provided evidence via a call recording that she had been informed of this charge. However, the FOS managed to persuade the broker firm to settle the complaint by only demanding payment of the insurer’s cancellation fee, and not their own fee as well. The FOS noted that: providing a lot of information to a customer about fees in the same call could have been confusing, it was unfair to ask for payment of two fees to cancel a policy, the broker should have provided a cash example of the fee rather than just a percentage and the broker should also have taken time to try and reach an amicable solution rather than threatening the customer with a debt collection visit
• A couple made a claim under a household insurance policy, but had the claim declined because the insurer said it had changed the terms and conditions and water ingress was no longer covered. The couple’s broker claimed to have provided them with the necessary information regarding the revisions to the cover. When investigating, the FOS could not find any evidence that the broker had drawn the customers’ attention to this significant exclusion, and indeed a telephone call included the broker saying “We haven’t changed anything at all”. The FOS instructed the broker to arrange for the claim to be paid, and to pay £150 for distress and inconvenience

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.