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ombudsman news

issue 58

December 2006/January 2007

ombudsman focus - on our recent specialist seminars on travel insurance and disputed card and cheque transactions

Readers of ombudsman news will know that the Financial Ombudsman Service regularly organises and takes part in conferences and meetings with the financial services industry and the professional consumer-advice network.

It is perhaps not such common knowledge that we also organise smaller, more informal events, which focus closely on particular topics of interest. These events allow more detailed discussions to take place between senior ombudsman service staff and industry specialists, with the aim of increasing mutual understanding.

Seminars we organised recently focused on two areas of financial services where we have noticed a slow but steady increase in complaints: travel insurance and disputed card and cheque transactions.

Representatives from a wide range of banks, building societies, travel insurance providers and brokers, together with officials from various trade bodies, such as the Association of British Insurers and the Building Societies Association, took part in the seminars at our offices in London's Docklands on 14 September and 31 October.

The informal nature of the meetings helped generate lively and detailed discussion. Ahead of the events we invited participants to suggest topics of particular interest. These suggestions formed much of the agenda and helped ensure the discussions focused on areas of common concern.

Feedback from participants has been positive, with the consensus being that businesses find events like this help them better understand the ombudsman's approach - and means they are better able to resolve complaints at an early stage, without the need for our direct involvement.

We are always keen to receive suggestions from businesses or consumer advisers of any particular topics they would like us to cover in events such as these. Just call our technical advice desk on 020 7964 1400 or email

seminar on disputed transactions
14 September 2006

This event covered a broad range of situations that may give rise to disputed transactions - from problems with personal identification numbers (PINS) to the cheque clearing process.

The following questions and answers summarise some of the issues touched on at the seminar.

what approach does the Financial Ombudsman Service take in cases involving disputed plastic card transactions-

A significant number of the banking complaints we see involve disputed card transactions. Typically, the customer denies having made a certain transaction - saying that someone must have discovered their PIN, or that the card must have been used without their permission or 'cloned'.

Meanwhile the banking or credit card firm insists the transaction is the customer's responsibility and that the problem may result from lack of sufficient care on the customer's part.

We decide such cases on the balance of probabilities. Is it more likely - considering all the details of the case - that the customer carried out the transaction but then forgot about it, or that their card was used fraudulently-

if a customer gets caught out by a cheque clearing scam are they automatically liable for their loss-

When unresolved disputes like this are referred to us, we have to decide what the customer probably asked and what the bank or building society probably said. This type of scam is well known within the industry. In all good faith, a customer releases goods to a third party on the understanding that the cheque they received for those goods has been paid, when in fact it has not.

We generally expect the bank or building society - as professionals - to have been more aware than the customer of any potential underlying issues, including the possible subtext to any queries or concerns the customer may have raised at the time they paid the cheque in.

seminar on travel insurance
31 October 2006

This event focused on pre-existing medical conditions and the ongoing 'duty of disclosure' under single trip and annual multi-trip policies. The following questions and answers summarise some of the issues touched on at the seminar.

how does the ombudsman assess disputes involving non-disclosure or partial disclosure of medical conditions-

Many of the cases we see involve a dispute over pre-existing medical conditions - an issue which only tends to come to light once a claim is made. Much will depend on the details of the individual case, but we will generally take into account the following factors:

  • did the customer know they had a particular condition-
  • did the customer fully understand the term 'pre-existing condition'-
  • was the customer asked clearly if they had such a condition- and
  • if the customer withheld information, why may they have done so-

at what point should it become necessary to declare a medical condition-

Disclosure is generally required at the time a relevant question is asked. If an insurer requires disclosure at any other time, it will need to take specific steps to ensure the consumer understands this.

what is the ombudsman's opinion when an insurer cancels an annual policy following the customer's declaration of a serious medical condition-

We would normally consider this unfair, especially where a trip has already been booked. If an insurer agrees to provide cover for a year, it has agreed to take the risk of medical conditions developing during this time and must accept this. Exclusions will only apply if the customer chooses to travel against medical advice.


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ombudsman news issue 58 [PDF format]

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.