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awards for non-financial loss
case studies

December 2006

Below are some examples to illustrate our general approach to making awards for distress and inconvenience and other non-financial losses. The cases reflect actual decisions made by ombudsmen in recent years. Assessing the appropriate amount to be awarded in individual cases depends on the circumstances of each case.

modest awards (less than £300)

  1. A customer kept on reminding a bank that, because it had recorded her address incorrectly, its letters had to be passed on to her by an irritated neighbour. The bank failed to correct its error for a couple of months. We made a modest award.
  2. An insurer made an administrative error which the customer had to bring to its attention four times - by phone and in writing - before it was sorted out. We made a modest award.
  3. A life assurance company made a mistake in telling a customer that he would be a beneficiary of a large windfall benefit. The mistake was not obvious to the customer, and the company only corrected it a month later. In the meantime, the customer had spent time making plans to spend the money and his family's expectations had been raised. We made a modest award.
  4. Despite reminders from the customer, an insurer delayed processing an insurance application for ten weeks. It then told the customer that it did not offer the cover he wanted. The customer remained uncovered until he was able to arrange insurance with another company. No insurable event occurred during the delay. We made a modest award.
  5. An insurer caused a policyholder to be without transport for two weeks when, under the terms of his insurance, it should have provided an alternative vehicle whilst the policyholder’s car was off the road as a result of an accident. After ensuring that additional travel costs had been reimbursed, we made a modest award.
  6. A customer needed some simple information from his building society, to help him sort out a problem with a third party. The customer knew the society had the information, but at first it refused - and then it delayed - for no good reason to provide the information. Overall, the problem took three months longer than it should have done for the customer to get it sorted out. We made a modest award.

significant awards (£300 - £1,000)

  1. A bank failed to set up a customer's direct debit payments correctly. It then reported late payment information to a credit reference agency, so the customer had difficulty obtaining other credit. Until that point the customer had not noticed the bank’s error. The bank apologised for its error but there was then a delay in correcting the information with the credit reference agencies. We made a significant award.
  2. A pensioner cancelled his home insurance. The insurer failed to act on his instructions and continued to take the direct debits from his bank account. When the policy was eventually cancelled, the insurer sought - without authority - to retain the premium for the period it considered it had been on risk. It threatened legal proceedings and instructed a debt collection agency for what it considered to be the outstanding premium. We made a significant award.
  3. Repairs were made to a customer’s property under an insurance claim. But the repairs were initially done to a poor standard. And when they were finally completed, the repairers nominated by the insurer did not make good internal decorations or clean up afterwards. The customer had no option but to finish the work himself, so that he and his family could get on with their lives. We made a significant award.
  4. An elderly couple had an endowment policy. When it matured, the proceeds should have been applied to redeem their mortgage. But because of a clerical error, only part of their mortgage was redeemed – and the couple were sent a cheque for the balance of the policy proceeds. They spent this on a holiday and home improvements. We accepted that the couple were caused a great deal of worry by the mistake, and made a significant award.
  5. A woman required emergency surgery while she was abroad. Her insurer's medical agents mishandled the situation and failed to give approval for the cost of the operation. As the medical condition was life-threatening, the operation went ahead anyway – with the insurer only agreeing to meet the cost at a much later date. We made a significant award.
  6. Following the sudden and unexpected death of the customer’s husband, the life assurance company repeatedly wrote letters addressed to the husband - rather than to her - about the insurance claim. We made a significant award.
  7. An insurer failed to pay for alternative accommodation for a couple and their three young children, following extensive damage to their home, for which they were insured. This caused the family to remain in their home for a month without essential facilities. We made a significant award.
  8. An investment adviser sold a medium-term investment to an investor with modest savings, when he knew the investor had to pay her tax bill later in the year. The investor’s inability to gain access to the investment, without penalty, when she had to pay the bill, caused her distress and inconvenience. We made a significant award.

exceptional awards (over £1,000)

  1. A bank wrongly dishonoured a cheque drawn by a business customer on its account. The cheque was payable to the customer’s main supplier - a firm operating within the same business community. The cheque was paid several weeks later. But the business was caused significant embarrassment within the community and, until sorted out, risked substantial loss of business. The business’s proprietor also had to spend a significant amount of time sorting the problem out, as well as reassuring other suppliers and customers - to try to stop the adverse effects of a “whispering campaign”. We made an exceptional award.
  2. A building society wrongly disclosed a customer's new address to her estranged and sometimes violent ex-partner. The customer faced further harassment and was forced to move home again. We made an exceptional award.
  3. As a result of a failure on the part of a bank, a County Court Judgment was made against a customer, causing embarrassment and affecting his credit rating. Despite complaints from the customer, the bank took no action to rectify the position until the customer referred the complaint to the Financial Ombudsman Service. We made an exceptional award.
  4. An elderly couple made a claim for subsidence that was very badly handled by the insurer. The repairs it arranged took too long to complete and they were not carried out to a high standard. The original work had to be rectified by new contactors. It was five years before the property was properly restored, and during this time the couple were forced to live in intolerable conditions. The insurer knew of the couple's circumstances but made no attempt to provide alternative accommodation. We made an exceptional award.
  5. A pension provider wrongly calculated the value of a customer’s pension policy. When the error came to light and the figures were corrected, the customer had to consider working again after initial retirement. We made an exceptional award.