The consumer’s issue:
“I purchased a new 18-plate SUV from a dealership and a four-year GAP insurance agreement at a cost of £450 in March 2018. In December 2021, I took this vehicle back and collected another new car. I was therefore advised to contact the GAP insurance policy administrator to reclaim the outstanding money for the portion of the term I was unable to use on the previous SUV. However, the insurance provider said that there was no policy in my name or against my vehicle registration.
I queried this with the dealership group head office, and they explained that the provider of the insurance was no longer being used by the business, and that they did not have a copy of the policy. As the selling dealership was also no longer trading, it was difficult to conclude what had happened, but I suspect it was a system glitch when setting up the policy.
I was informed that the refund would be £28.50 – the equivalent of three months pro-rata. I would be absolutely fine to accept this amount in ordinary circumstances, but I am troubled by the insurance provider informing me, on more than one occasion, that a policy in my name and for my former vehicle, did not exist, although I have a receipt for the £450 I paid.
To resolve my complaint, I would like proof that the policy I paid for was actually in place, as I have no evidence that this was the case. I am happy with the pro-rata refund if this can be provided, but if not, then the full policy amount should be refunded and an apology issued.”
The accredited business’ response:
- As the head office of the dealership group, we can confirm the consumer did purchase GAP insurance for their 18-plate vehicle from our dealership in 2018.
- When trying to investigate the dispute, the issue we faced is that our dealership has since closed, so the files were placed into archive storage 100 miles away.
- The account manager for the insurance administrator has also been made redundant, as the business is no longer serving the UK market.
- As a result, the information available to us is limited. So, we have made a commercial decision to issue the consumer with a pro rata refund of £28.50, which is all that we believe they are entitled to.
- We are unsure why the product administrator holds no record of the policy, but we have assured the consumer because all parties have proof of purchase, and in the event of a claim, the policy terms would have been honoured.
- We hope this clarifies our position on this matter.
The adjudication outcome:
- The Motor Ombudsman adjudicator stated that any advertisements, promotions, publications or communications, whether in writing or otherwise, should not contain any content which is likely to mislead or be misunderstood by a consumer.
- The vehicle order form showed the consumer paid £450 for the GAP insurance policy.
- The consumer equally supplied an email from the policy administrator which confirmed they were unable to match the vehicle registration with any policy on their files.
- In the absence of any evidence from the business which supported they had ensured the policy was activated, the adjudicator determined that it was more likely than not that the policy had not been put live.
- The Motor Ombudsman adjudicator reviewed the evidence and found a breach of the Vehicle Sales Code had occurred, and therefore upheld the complaint in the consumer’s favour.
- The adjudicator therefore determined the fair outcome in this case would be to ask the business to offer the consumer a full refund of £450.
Conclusion
- The business responded to the adjudication outcome to say they had already provided the consumer with £28.50, and they would therefore refund the outstanding balance of £421.50.
- The consumer confirmed to the adjudicator that they had accepted and received the refund of £421.50.
- As both parties were happy with the outcome, the case was closed.
