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ombudsman news

Q&As

featuring questions raised recently with our free, expert helpline for businesses and advice workers

penalised for netting a bargain?

I'm an insurance broker and I've become involved in a row between my customer and her insurer. My customer got a good deal on the car when she bought it, paying £1,000 less than you would typically pay for the same make, model and mileage. Unfortunately, she was recently involved in an accident and the car is a complete write-off. The insurer is refusing to pay her a valuation in line with the trade guides, saying that this will put her in a much better position than she was in before the accident. The customer feels that she shouldn't be penalised just because she got a bargain. Who is right?

We would start by looking at the terms of the policy. If the contract says that the insurer will pay market value of the car before the accident, then unless there are compelling reasons not to, this is the right outcome.

If the trade guides all reflect a similar - higher - price, then it's likely that if the insurer pays the consumer £1,000 less, she won't be put back in the position she should be in, because it's unlikely she'll be able to buy the same car again for less money.

Our technical note on motor vehicle valuation provides a lot of information about our approach to these disputes, and it's recently been updated.

keeping on top of things

I remember reading in September that the ombudsman will be doing an external review of the industry. Is there any more news on this, and is it something I should keep up to date with?

The review - which is now underway - goes quite a bit wider than just the financial services sector. The aim is to understand a wide range of current and future changes in areas like technology, consumer expectations and brand management wherever they're happening. That's because even if they're not affecting our work now, they almost certainly will in the future. To help lead this work, the board recently appointed the Future Foundation, specialists in analysing consumer and business trends, which they've done for a wide range of clients including Oxfam, Tesco, and the Co-operative Group.

We want this project to be informed by a really wide range of people, so we hope that a lot of you will not only keep up to date, but get involved too. Once the Future Foundation team have done their initial background research, they'll be getting out and about talking to companies, consumer groups and others in our sector and beyond. 

We've also asked them to share and discuss their findings openly with the organisations we work with as they go along. That way, by the time the project is finished, we should have something which is relevant and useful for the financial services sector - and for other sectors too - as well as for us and our stakeholders.

Keep an eye on our website. We'll publish more information soon.

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ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.

The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.