- 1Read
- 2Ask
- 3Decide
- 4Ruling
Case 18 of 19 · Level 2
Life assurance · two policies sold by phone
Time to think
The thick file · about 10 minutes
The complaint
Not long after her husband died, she started to get unsolicited calls from an insurance company selling life assurance. She told the caller she did not feel up to making financial decisions, and says that when she said she needed time to think, the caller did not listen. Feeling pressured, she took out two life policies. The insurer then started chasing her for payments, so she asked to cancel, and she had to ask several times before it did. She was charged a fee for the cancellation, and the chasing carried on. She complained to the insurer, was unhappy with its reply, and brought the complaint to the ombudsman.
The firm's answer
The published case does not set out what the insurer said in reply to her complaint, only that she was unhappy with it. Its side is in what the file shows it did: it sold her two life policies on a call, chased her for payments, cancelled the policies only after she had asked several times, and charged a fee for the cancellation.
Evidence in the file
Exhibit A · The calls
Unsolicited calls from an insurance company selling life assurance, which began not long after her husband died. A life policy pays a lump sum on the death of the person whose life is assured.
Exhibit B · Her account of the sale
She says she told the caller she did not feel up to making financial decisions, and that she needed time to think, and that the caller did not listen. In the end, feeling pressured, she took out two life policies.
Exhibit C · After the sale
The insurer began chasing her for payments, and she asked it to cancel the policies.
Exhibit D · Her complaint
She complained to the insurer and was unhappy with its reply. She then brought the complaint to the ombudsman.
The call where the policies were sold
A recording of the call is on the file. On it she says, several times, that she is grieving and suffering with stress and anxiety. The adviser does not seem to understand, and tells her she needs to get the policies set up as quickly as possible. What the insurer heard on that call, and what it did with it, is the whole question.
How cancelling went
She had to ask several times before the insurer cancelled the policies. It then charged her a fee for the cancellation, and went on chasing her for payments.
Selling to someone who is grieving
Background, not from this file: a firm may sell life assurance by phone, and many people want the cover. But the regulator expects a firm to treat its customers fairly at every stage, the sale included, and to notice when a customer may be vulnerable, for example after a bereavement. Noticing is not enough on its own: the question is what the firm did with what it heard, such as slowing down, offering time, or putting the details in writing.
The cancellation fee
Not in the file. The published case does not say how much the fee was, or what the policy terms said about charging it.
The insurer's reply to her complaint
Not in the file. The case says she was unhappy with the reply, but does not set out what it said.
Uphold the complaint, or side with the firm?
The ruling
Given by the ombudsman
Upheld
Why
The ombudsman listened to a recording of the call in which the policies were sold. On it she said several times that she was grieving and suffering with stress and anxiety. The adviser did not seem to understand, and told her she needed to get the policies set up as quickly as possible. In the ombudsman's view, the insurer had enough information on that call to recognise that she was vulnerable. It ought to have treated her fairly during the sale, and it did not. So the insurer was told to refund the cancellation fee it had charged her, and to pay her £300 for the distress and inconvenience it caused her at what was already a very hard point in her life.
What the firm had to do
The insurer was to refund the cancellation fee and to pay her £300 compensation for the distress and inconvenience.
What an adjudicator takes from this. In a case about a sale, the sale call is the evidence that matters most, because it shows what the firm heard before the customer said yes. Here the recording showed what she said, several times, and the question was what the adviser did about it. What mattered was not that she later changed her mind, but whether the firm listened first. If you are asked to decide something important when you are not ready, say so plainly, ask for the details in writing, and take the time you need. Keep a note of the date, who rang and what was said; a firm that records its calls will hold the rest.
Rewritten in our own words from a case the ombudsman published.
Read the guide: The Consumer Duty explained: what it asks of financial firms
What is fair and reasonable is a judgement. The ombudsman gives one; people who read the same file often give another, and this game is about how people weigh the same facts, not about being right. Built from cases the Financial Ombudsman Service and other bodies have published, and from Docketory's own files, rewritten in our own words with every name removed. Docketory is not connected with any of them, and this game is not advice on your own case.
Got a parking ticket? Check it free.
Check your ticket free