DRN-6053087

The complaint Mr W has complained about the actions U K Insurance Limited trading as Churchill (UKI) took after he applied for a motor insurance policy. What happened In April 2025, Mr W was recommended an insurance broker by a friend to obtain reasonably priced insurance. Mr W sought out this broker (a ‘ghost broker’) through social media, and they began communicating through a messaging application. The ghost broker told Mr W the information he would be using to take out a policy and how much they would charge him. The policy was then set up for Mr W with UKI. UKI cancelled the policy soon after as they thought it was fraudulently set up. They also added a fraud marker to the relevant database. When Mr W complained to UKI about their actions, they maintained their position – so Mr W referred his complaint to this Service. He said he accepts he made a mistake by trusting a ghost broker without checking properly, but that he had no intention to mislead anyone or commit fraud. And that the fraud marker has meant no insurer will insure him which is affecting his employment and making it difficult to visit family. He said he wants the fraud marker removed or amended. An Investigator looked into what happened but didn’t uphold the complaint as they didn’t think UKI acted unfairly by cancelling the policy or applying a fraud marker. Mr W didn’t agree, so the complaint has come to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. When applying for an insurance policy Mr W had a responsibility under the Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA) to take reasonable care not to make a misrepresentation. It isn’t in dispute that a ghost broker deliberately misrepresented Mr W’s details when taking out the policy. Nor is it in dispute that, considering the false information given to UKI included Mr W’s occupation, when he arrived in the UK, and how long he had his licence for, UKI would have likely offered the policy on different terms or not at all had they been given the correct information. So, I don’t need to make a finding on whether a qualifying misrepresentation was made when Mr W took out the policy. The crux of Mr W’s complaint is that he’s unhappy with the fraud marker UKI applied against him. So, I’ve thought about whether it was fair and reasonable for them to rely on the fraud term in the policy to cancel Mr W’s policy and apply the marker. The policy says UKI may take action if Mr W or anyone acting or appearing to act on Mr W’s behalf provides false, incomplete, exaggerated or misleading information. It says they action UKI may take includes cancelling or voiding the policy and keeping any premium Mr W paid. And that if UKI discovers fraud, they have the right to share information about Mr W’s behaviour with other organisations to prevent further fraud.

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I’ve thought carefully about what Mr W said about him not being in the country for long and not understanding how insurance works in the UK. I’ve seen the messages between Mr W and the ghost broker. The ghost broker told Mr W what information they were using to apply on his behalf. And they asked Mr W to put ‘family’ as the reference when sending him a deposit, which he did. The information for the application was clearly false, and I haven’t seen anything that shows Mr W tried to correct the ghost broker at any point or questioned their actions. I think a reasonable person would have understood that the ghost broker was going to pass on false information to UKI. And I don’t think it was unreasonable for UKI to think the ghost broker’s misrepresentation on Mr W’s behalf was deliberate and fraudulent in nature. So, although I was sorry to hear about how the fraud marker has been affecting Mr W, I’m not going to interfere with UKI’s decision to rely on the fraud term to cancel the policy and apply the marker. My final decision For the reasons above, I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr W to accept or reject my decision before 11 May 2026. Andrew Wakatsuki-Robinson Ombudsman

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