FOS Has Partially Upheld the Complaint — Based on Facts and Figures It Admits It Does Not Have

The Financial Ombudsman Service investigator, Daniel Hughes, has partially upheld a GAP insurance complaint against Johnson Cars (appointed representative of ITC Compliance).

However, the decision raises a serious and unavoidable question… how can FOS reach a fair and reasoned outcome when it admits that it does not have the key facts and figures needed to assess the complaint properly?

FOS accepts that ITC Compliance Limited has not confirmed how much chain commission was earned from the sale of the GAP insurance policy. FOS also accepts that, without knowing that figure, it cannot say for certain whether the commission affected whether the customer was treated fairly. It further accepts that it has not seen evidence showing whether the commission was proportionate to the broker’s costs.

Despite that, FOS has still moved to partially uphold the complaint.

It will come as no surprise that the standard of investigation has resulted in appeals from both sides.

You cannot assess fairness without the commission

The level of commission is not an optional extra in these complaints, it is front and centre.

This complaint concerns a GAP insurance policy sold through a distribution chain. In that context, commission is not just a background commercial arrangement. It determines whether the customer received fair value, whether the sale was distorted by financial incentives, and whether the customer was treated fairly.

FOS itself refers to the FCA’s previous comments that some GAP insurance arrangements involved commission of up to 70% of the value of insurance premiums being paid to parties in the distribution chain, including motor dealerships.

That makes the missing commission figure highly material.

When commission in the market reaches those levels (and higher), the commission has to be investigated properly. The amount paid, who received it, how it was split, and whether it was proportionate were all essential facts.

Yet FOS admits it does not have them.

A partial uphold built on missing evidence

FOS’s position is deeply troubling.

It has partially upheld the complaint as it has identified unfairness. It has recognised that the firm has not provided key evidence but it has still failed to disclose what meaningful steps it took to obtain the missing commission details.

What exactly did FOS ask ITC Compliance Limited to provide?

Did it request the full chain commission breakdown?

Did it request commission agreements, invoices, bordereaux, sales records or internal remuneration documents?

Did it request details for each party within the chain?

Did it ask the underwriter?

Did it ask the administrator?

Did it ask the distributor?

Where is the date of the commission request?

Where is the wording of the commission request?

Where is the follow-up?

Where is the escalation?

Where is the explanation of what was requested and what was not provided?

Where is the investigation trail?

Did it draw any adverse inference from the failure to provide the figures?

These are fundamental questions about the integrity of the investigation.

FOS cannot say it does not have the figures, rely on their absence, partially uphold the complaint, and then refuse to show what it did to obtain them.

The absence of that transparency is unacceptable, and suggests that the investigator simply wanted the complaint off his desk so that he could hit his closure target bonus.

Unfortunately for him, this complaint is far from being closed.

Fair value cannot be assessed in a vacuum

FOS says it is not persuaded that the policy did not represent fair value, a conclusion cannot safely be reached without the commission figures.

The cost of a GAP product to a customer is not just the risk price. It is a bundle of costs, risk pricing, profit, commission and distribution-chain payments. If a substantial proportion of the premium was paid away in commission, which it likely is, that would be directly relevant to fair value.

Without the figures, FOS cannot know whether the customer was buying meaningful insurance value or simply funding an inflated sales chain.

It cannot know whether the commission was proportionate.

It cannot know whether the customer was treated fairly.

It cannot know whether the product represented fair value in this individual sale.

FOS’ own decision exposes the contradiction… it refers to fair value, but admits that the financial data needed to test fairness and proportionality has not been obtained.

The underwriter issue remains unresolved

FOS has also failed to disclose whether it properly investigated the underwriter behind the GAP policy.

The underwriter could be central to the fair value assessment. If the underwriter later paused GAP sales, changed its arrangements, altered pricing, reviewed commission structures or was affected by regulatory intervention, that is relevant to this complaint.

But we have not been shown whether FOS obtained those details.

Again, the questions are simple.

Who was the underwriter?

Was the underwriter asked for evidence?

Was the underwriter asked about historic fair value concerns?

Was the underwriter asked whether GAP sales were paused or reviewed following FCA intervention?

Was the underwriter asked about the commission structure attached to this policy?

If FOS did ask, it must disclose the request.

If it did not ask, then the investigation was plainly incomplete.

This is why we have submitted a DSAR and FOI request

FOS has left us with no choice.

A Data Subject Access Request has now been submitted.

A Freedom of Information request has also been submitted.

The purpose is straightforward, to obtain the information FOS has refused to provide voluntarily.

We are seeking the investigation trail, the correspondence, the internal notes, the requests for evidence, the responses received, the missing commission queries, the underwriter enquiries, the explanation of what FOS did, what it did not do, and why it reached a partial uphold despite admitting that key facts and figures were absent.

This could have been dealt with transparently.

FOS could have simply disclosed what it asked for and what it received.

It could have explained whether ITC Compliance Limited refused, failed or neglected to provide the chain commission details.

It could have confirmed whether any adverse inference was drawn.

It could have shown its working.

Instead, it refused to be transparent so we are now forcing disclosure through formal routes.

We could have done this the easy way

The issue now is bigger than the original GAP complaint.

It is about whether FOS is conducting proper investigations into GAP insurance complaints, or whether it is reaching outcomes while leaving the most important evidence untouched.

It is about whether firms can avoid scrutiny by failing to provide key financial information.

It is about whether consumers are expected to accept decisions based on incomplete evidence.

It is about whether FOS is prepared to hold businesses to account, or whether it is content to operate behind a wall of opacity.

We could have done this the easy way.

FOS could have provided the investigation record.

FOS could have disclosed the commission requests.

FOS could have confirmed what action it took when the figures were not provided.

FOS could have explained whether the dealership, broker, insurer, administrator and underwriter were all pursued for the missing evidence.

It did not.

So now we do it the hard way.

Full disclosure will now be pursued and provided

FOS has partially upheld the complaint based on facts and figures it admits it does not have.

That should concern every consumer that relies upon FOS.

An ombudsman service cannot claim to deliver fairness while failing to obtain the financial evidence needed to assess fairness.

It cannot rely on missing commission data while refusing to disclose how hard it tried to obtain it.

It cannot refer to fair value while lacking the very figures needed to test value.

And it cannot expect confidence while hiding the workings of its investigation.

In our view, this case exposes a serious failure of transparency, rigour and accountability.

The DSAR and FOI requests are now in motion.

The missing evidence will be pursued.

The investigation trail will be exposed.

And if FOS has failed to conduct a proper investigation, that failure will be brought into the open.