DRN-6293796

The complaint Miss Z has complained about the way Wakam UK Limited cancelled her motor insurance policy. Where I’ve mentioned Wakam, it also includes their agents. Miss Z is represented by her sister, but for ease of reading I’ve only referred to ‘Miss Z’ except where it’s important to distinguish between them. What happened Miss Z took out a policy with Wakam through an online comparison website and added her sister as a named driver. During their verification checks, Wakam thought the information Miss Z gave them showed her sister was the main driver, not Miss Z, so they gave notice to Miss Z that they would cancel the policy in seven days. After hearing this, Miss Z wanted to cancel the policy herself, so asked to do so before the seven-day deadline, but Wakam refused. Miss Z didn’t think this was fair so complained to Wakam. And she said Wakam’s online chat function didn’t let her explain what happened to a real person. Wakam acknowledged they didn’t reply to Miss Z through their online chat service in a timely manner but maintained their stance on the cancellation as they thought there was sufficient evidence that incorrect information had been provided when Miss Z applied for the policy. After Miss Z referred her complaint to this Service, Wakam offered to increase the compensation from £20 to £50 for distress caused by delays in responding through their online chat service. An Investigator looked into what happened and thought the offer was fair. Miss Z didn’t agree so the complaint came to me to decide. I wrote a provisional decision upholding the complaint. Its findings form part of this final decision, so I’ve copied them in below. I also invited any further comments or evidence before I issued a final decision. I said the following: As ours is an informal service, I’m not going to respond to every point or piece of evidence Miss Z and Wakam sent us. Instead, I’ve focused on what I consider to be key or central to the complaint. But I’d like to reassure both that I have considered everything submitted. Wakam said Miss Z misrepresented the owner and intended main driver of the vehicle when taking out the policy. They thought Miss Z’s sister was really the main driver, not Miss Z. This would be considered a misrepresentation, and the relevant law is The Consumer Insurance (Disclosure and Representations) Act 2012 (CIDRA). CIDRA requires consumers to take reasonable care not to make a misrepresentation when taking out a consumer insurance contract (a policy). The standard of care is that of a reasonable consumer. If a consumer fails to do this, the insurer has certain remedies provided the misrepresentation is – what CIDRA describes as – a qualifying one. And for it to be a qualifying misrepresentation the insurer has to show it would have offered the policy on different terms or not at all if the consumer hadn’t made the misrepresentation.

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CIDRA sets out a number of considerations for deciding whether the consumer failed to take reasonable care. And the remedy available to the insurer under CIDRA depends on whether the qualifying misrepresentation was deliberate or reckless, or careless. Wakam have said Miss Z misrepresented who the main driver of her vehicle was going to be. They said they saw the sister attempted to take out a policy under her own name before Miss Z later took her one out. The sister’s policy was going to be around £1,600 more expensive than the one Miss Z took out with Wakam. Wakam have also said Miss Z entered her sister’s phone number, email address and banking information when taking out the policy. Having looked at the questions Wakam asked Miss Z and the answers shown on the Statement of Fact, I haven’t seen anything to persuade me that Miss Z shouldn’t be considered the main driver of the policy nor that she misrepresented when answering questions about the owner and registered keeper of the vehicle. Miss Z sent me a copy of the V5C which shows she is the owner and registered keeper of the vehicle – and this is also what it says on the policy Statement of Fact. Miss Z has also shown she took out previous policies for the same vehicle with the sister as the named driver. I think any reasonable person would have answered questions about the owner and registered keeper in the same way. Wakam is concerned that Miss Z’s sister went to take out a policy under her own name but didn’t, only for Miss Z to take one out instead with her sister as a named driver. But I think Miss Z has given persuasive evidence as to why. She explained to me that around the time they were considering which sister would be using the vehicle more – and decided that since Miss Z needed the vehicle to commute and her sister worked from home, it would make sense for the policy to be in Miss Z’s name. Wakam haven’t explained why Miss Z using her sister’s phone number and email address would be material to whether they offered her the policy. But for clarity, I asked her why she didn’t use her own. She said she was signed into her sister’s account for the comparison website which is why the sister’s details pulled through to the application. This is plausible, and I’m satisfied she likely wasn’t trying to misrepresent who the main driver of her vehicle was by using her sister’s communication and payment details. Although I understand why Wakam was concerned about who the main driver was, I’m disappointed they decided to cancel the policy without first speaking to her about their concerns. Overall, I’m not satisfied Wakam have shown Miss Z failed to take reasonable care under CIDRA when taking out the policy. Nor do I think Miss Z was attempting to obtain insurance she wasn’t entitled to or deceive Wakam when taking out the policy. Since I don’t think Ms C made a misrepresentation, it follows that I don’t think Wakam were entitled to take any action under CIDRA – nor do I think they had a valid reason to cancel Miss Z’s policy. Wakam have accepted they didn’t respond to her live chat requests fairly and have offered £50 in compensation. But because Wakam cancelled the policy unfairly, Miss Z has needed to spend a significant amount of time putting things right and she will have been concerned about how the cancellation affects her in the future. When she tried to talk to Wakam about the cancellation, they failed to answer in a timely manner when at all. Taking this into account, I think £250 would be a more reasonable amount of compensation in the circumstances. Miss Z has since taken out another policy with a different insurer, and she was trying to cancel her policy herself during the 14-day cooling off period, so I won’t be directing Wakam to reinstate the one she had with them. To put things right, I think Wakam should remove

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record of the cancellation from all internal and external databases and pay the difference between her current policy and what Wakam charged her. Miss Z’s new policy cost £2,417.30. Her policy with Wakam cost £1,760.40. I’m intending to direct Wakam to pay £656.90 plus 8% interest from the date the policy was cancelled until the date they pay this amount. Miss Z didn’t reply to my provisional decision. Wakam disagreed, saying they remain concerned the policy wasn’t arranged in line with the true risk. And they disagree with my statement around whether the use of Miss Z’s sisters contact and payment details altered the risk. I’ve explored Wakam’s arguments below. 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. Miss Z has shown the V5C for the vehicle is in her name – and Wakam have acknowledged this. But they still think Miss Z’s sister was the main driver of the vehicle rather than Miss Z. They said: • The contact details, including address and phone number, belong to the sister, who is noted as the additional driver. • The policy was used using the sister’s banking details. • Multiple communications with Wakam, including general enquiries and the complaint itself, were conducted by the sister. • Emails were consistently signed in the sister’s name, not Miss Z’s, with no clarification at any stage that she was acting on behalf of the main policyholder. • At no point during the policy lifecycle did Miss Z indicate she had used her sister’s comparison website account. I appreciate that Miss Z’s sister has been corresponding with Wakam and with us, but I’m not persuaded this is evidence that the sister was the main driver of the vehicle – it’s not unusual for family members to represent each other when taking out and communicating about a policy. And even if I disregarded Miss Z’s explanation that she was signed into her sister’s comparison website account, I don’t think Miss Z’s sister taking out a policy using her own email address and phone number proves the sister was the main driver of the vehicle. Miss Z has been the main driver of the vehicle for her current policy and previous ones, and the V5C for the vehicle is in her name. And I think she has given a plausible explanation for why Miss Z needed to use the vehicle more often than her sister. These points, along with Wakam not proving otherwise, persuade me that Miss Z was the main driver of the policy. Since Wakam haven’t persuaded me to depart from what I said in my provisional decision, I’m directing them to take the action I set out under ‘my final decision’ below. My final decision For the reasons above, I uphold this complaint and direct Wakam UK Limited to: • Remove all record of the cancellation from internal and external databases. • Write a letter to Miss Z which explains that they didn’t cancel her policy and she doesn’t have to declare it to future insurers. • Pay Miss Z £656.90 for the difference in premium as set out above. • Pay 8% interest on this amount from the date the policy was cancelled until the date

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they pay this amount.* • Pay Miss Z a total of £250 compensation. *If Wakam UK Limited thinks that they’re required by HM Revenue & Customs to deduct income tax from that interest, they should tell Miss Z how much they’ve taken off. They should also give her a tax deduction certificate if she asks for one, so she can reclaim the tax if appropriate. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss Z to accept or reject my decision before 13 May 2026. Andrew Wakatsuki-Robinson Ombudsman

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