DRN-5819861

The complaint Mr and Mrs C complain that they were mis-sold term assurance by Usay Business Ltd trading as Usay Compare (‘Usay’). Mr and Mrs C have brought their complaint via a representative, but I will refer to them throughout for ease. What happened I've outlined what I think are the key points and events involved in the complaint below. On 6 December 2023, after discussing their circumstances and needs, Usay provided Mr C with three quotes for a £170,000 joint term assurance policy on a decreasing basis (‘DTA’) And it recommended the cheaper of the three quotes at a monthly cost of around £227 to replace their existing level term assurance (‘LTA’) policies – Mr C and Mrs C had separate existing policies, each with cover of around £130,000 for total monthly premiums of around £306. Mr C said he’d check his other policies and the figures first. So a follow up call was arranged and to go through Mr and Mrs C’s health questions. That follow up call took place on 9 December 2023, the recommended DTA policy was taken out and, a few days later on 11 December 2023, Usay let Mr C know they could now cancel their existing policies if they wanted to. On 15 December 2023, Mr C emailed Usay to cancel the DTA policy as he said he was certain their existing cover isn’t reducing over the term. In response, Usay said it could check the cost of LTA instead given Mr C had wanted to save money. And, on 20 December 2023, Mr C said that as he was on holiday and didn’t want to pay for multiple policies in the meantime, he’d like to cancel the DTA policy and discuss LTA with it on his return. Usay didn’t cancel Mr and Mrs C’s DTA policy though. And, when it spoke to Mr C on his return home on 11 January 2024, Mr C said he was still paying for his existing policies as well as the DTA policy that he’d asked to be cancelled. And he agreed that Usay could provide him with a new LTA quote in place of the DTA policy. New LTA quotes were provided, further medical questions were asked and the LTA policy was accepted on 20 January 2024 for a monthly premium just over £303, but backdated to 9 December 2023, in place of the DTA policy and a suitability report for the LTA policy was sent to Mr C. I’m sorry to hear that Mr C later became unwell. I understand that, as a result, he made a claim on his new LTA policy that was declined by his insurer in mid-2024 and that it voided the policy with a full refund of premiums based on how he’d answered the health questions at inception. Mr and Mrs C then went on to complain to Usay that it hadn’t cancelled the DTA policy when requested and Mr C said that, if it had done that, he would have stuck with his existing

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policies rather than having gone on to change the DTA policy to a LTA policy and then cancelled his existing policies. Usay sent its final response letter. It said, in summary, that while it didn’t think there was anything wrong with its advice, the DTA policy wasn’t cancelled as per Mr C’s request when it should have been. While Usay apologised and offered Mr C £300 in compensation to make up for the service received in respect of that, it went on to say that Mr C then agreed for its adviser to look for a replacement LTA policy instead, which he went ahead with. It said it understands Mr C’s policy claim was declined as he didn’t answer the health questions correctly. And Usay said that if he’d answered those correctly it wouldn’t have able to set up the new DTA, and then the LTA, policy for Mr C – it would have instead recommended he stay with his existing insurer – so it isn’t causative of his lack of cover. Unhappy with this answer, Mr and Mrs C referred the complaint to our Service. And, across the complaint correspondence, they said, in summary, that: • Usay didn’t comply with regulatory rules and principles. For example, it failed to take reasonable care to ensure the advice was suitable, as it gathered limited information about their existing cover and primarily focused on coverage amounts and terms rather than on whether this was LTA or DTA. • Mr C was told to cancel their existing policies on 11 December 2023, before he had the opportunity to review details of the DTA policy. And when he later attempted to cancel this he wasn’t told of the risk of having no cover in the interim. • He wasn’t sent a suitability report for the DTA policy for him to reflect on this before the contract was concluded. He only received one for the new LTA policy in January 2024, which incorrectly said this had been processed with a start date of 9 December 2023 as that’s when the DTA policy was sold. And this contained limited information on why the recommendation was made, other than ‘to provide as much cover as possible within their budget’. • The concept of DTA wasn’t explained and if had been this wouldn’t have been acceptable. Mr and Mrs C already held separate LTA policies each providing £130,000 in cover and they weren’t told that this would pay twice – once on Mrs C’s policy and then separately on Mr C’s. Overall, they ended up paying the same premium for less total coverage. And alternatives weren’t explored – Mr C wasn’t told he could just take out cover for the shortfall in mortgage protection. • Upon learning the new DTA policy wasn’t LTA, Mr C requested its cancellation which wasn’t actioned until the new LTA policy was put in place. • Mr C would like Usay to pay compensation for his original insured amount that he had with his existing LTA policy of £130,000. Our Investigator went on to explain they weren’t asking Usay to do anything more. Ultimately, they said that: • They were satisfied Mr and Mrs C were provided with suitability letters in a timely manner. Usay has confirmed a suitability report for the DTA policy was issued in December 2023 but that the new LTA suitability report overwrote the old one on the system, so it can’t provide a copy. And the new LTA policy was backdated to the original DTA start date of 9 December 2023. • They didn’t think Usay’s advice was unsuitable. Its recommendations catered to Mr and Mrs C’s need to pay off the mortgage should anything happen, but for a more cost-effective premium. It also clearly explained that the first policy was on a DTA basis and the policy terms were agreed to. • In respect of Mr C’s points about what he was and wasn’t told by Usay in December 2023 about cancelling existing coverage upon taking out the DTA policy, and then

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ensuring he had interim coverage if he cancelled the latter policy, Mr C’s points about this fall away given he didn’t go on to cancel his existing cover in any event until later in January 2024. • While Usay has recognised it got things wrong when it didn’t cancel the DTA policy on receipt of Mr C’s request, they weren’t asking it to do anything more. And this failure to cancel wasn’t causative of the position Mr C is now in. As no agreement could be reached, the complaint was referred for an Ombudsman’s decision. 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. And, while I’ve carefully considered Mr and Mrs C’s complaint – the crux of which I think is that they don’t think Usay gathered and provided them with the information and advice that it should have – I’m not asking it to do anything further in the circumstances for the reasons set out below, which are largely the same as those given by our Investigator. In deciding this complaint I’ve taken into account relevant law and regulations, the Regulator’s rules, guidance and standards and codes of practice, along with what I consider to have been good industry practice at the relevant time. At this point, I should say that I have summarised and responded to Mr and Mrs C’s complaint in far less detail than the parties have and in my own words. I’m not going to respond to every point made. No discourtesy is intended by this. Our rules allow me to do this and it simply reflects our informal nature. If there’s something I’ve not mentioned, it isn’t because I’ve ignored it – I haven’t. I’m satisfied I don’t need to comment on every point to reach my decision. Having listened to Mr C’s calls with Usay, I think its adviser gathered a reasonable level of information about Mr and Mrs C’s circumstances and demands and needs to make the recommendations it did in the circumstances. I say this because, while Usay didn’t go into the cover levels for each of their existing policies during the call on 6 December 2023, it was aware this wasn’t more than £130,000 and that the total premiums for these were just over £300 per month. Mr C said he wanted to get that cost down and, when asked if they had a level of cover they were working towards, he said that if either of them died or got critically ill they wanted to be able to repay their repayment mortgage, as they’d remortgaged and now had an outstanding balance of around £170,000. The adviser also asked Mr C if their existing policies were on a level basis. And Mr C didn’t give any indication in response that he didn’t understand what the adviser meant by that. Instead, I think Mr C showed he reasonably understood this when he said he thought so but would check. And I think that Usay’s joint DTA recommendation was reasonably explained to Mr C when its adviser said, for example, that Mr and Mrs C could save money if they just focused on covering their £170,000 mortgage on a decreasing scale, which it said meant the policy would track their mortgage to age 65 and pay that off if one of them passed away. I also note that Mr C then had some time to reflect on that – as well as the opportunity to check his existing policies and the basis of those in the way he’d said he wanted to – before his follow up call with Usay a few days later on 9 December 2023, during which it again explained it was recommending decreasing cover but with a level premium. So, overall, I think Usay reasonably explained the basis of DTA cover and its recommendation to Mr C. The evidence suggests to me that Mr and Mrs C went ahead on

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that understanding. And, while Mr C later changed his mind about the DTA policy and now feels differently about both the policies that Usay recommended, I don’t think it did anything wrong in making the recommendations that it did. I recognise the level of joint cover recommended was less than Mr and Mrs C’s total individual cover under their existing policies. But affordability to repay a mortgage is usually based on joint income, this only needed to be repaid once and, importantly, their existing policies wouldn’t have done that if one of them passed away. I think Mr C appreciated this given he told Usay that one of his objectives in seeking new cover was to ensure the mortgage would be repaid if either of them passed away. Mr C didn’t detail any further coverage need beyond repaying this when Usay asked him about the level of cover required. And, overall, I think that both Usay’s DTA and then LTA policy recommendations fairly achieved Mr and Mrs C’s objectives of providing the full mortgage protection they needed and in a cost-effective way, given these would do that for around the same, or less than, the total cost of what they were currently paying, rather than more. I appreciate Mr C thinks Usay could have just recommended joint top up cover for the shortfall in mortgage protection to go with their existing cover. But that would likely have increased their overall premiums when Mr C said they didn’t want to pay more than they were. So, in summary, while appreciate Mr C’s position, I think that Usay’s recommendations fairly and reasonably met Mr and Mrs C’s objectives. And this means I’m not asking it to do anything in respect of that. Mr C is also unhappy Usay didn’t cancel the DTA policy when requested. As per the emails set out in ‘What happened above’, Mr C clearly requested to cancel this a few days after taking it out. But, while Usay didn’t action this in mid-December 2023 when it should have – which Usay has since accepted – I’m not satisfied Mr C would likely be in a different position now if it had. To be more specific, while I appreciate Mr C’s position, I’m not persuaded by his comments that if Usay had cancelled the DTA policy when it should have that they would have kept their existing policies rather than later going on to take out the new LTA policy. Instead, I think it’s likely Mr and Mrs C would have still gone on to take that out and cancel the existing policies when they did. I say this because I think Usay would still have offered to look at a new LTA policy for Mr C in the way it did in response to his initial DTA cancellation email. And I think that Mr C would likely still have said in response, given that’s what he did on 20 December 2023, that he’d be open to doing that when back from holiday on 11 January 2024, which is which is what then happened upon his return. I understand Mr C has already had a refund of premiums from the insurer. And Usay has offered him £300 in compensation to make up for its failure to cancel the DTA policy when he requested – I think that’s a fair and reasonable amount in the circumstances to make up for the service he received and the frustration caused to him by that and, for the reasons given, I’m not asking Usay to do anything more than this. My final decision For the reasons given, I’m not asking Usay Business Ltd trading as Usay Compare to do anything more than pay Mr and Mrs C £300 in compensation, if it hasn’t already done so. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C and Mrs C to accept or reject my decision before 20 May 2026. Holly Jackson Ombudsman

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