Marshmallow Insurance Limited · DRN-5928171

The complaint Mr A has complained that Marshmallow Insurance Limited (“Marshmallow”) has unfairly applied a CIFAS (fraud) marker against his name and that this is causing him hardship. What happened Mr A took out a motor insurance policy with Marshmallow. After providing the documents it requested from him, Marshmallow told Mr A it was unable to proceed with his car insurance because he’d provided a fraudulent document. It said the policy would be cancelled with immediate effect. It uploaded his case to the National Fraud Database. Mr A complained. He accepted he’d altered the V5 registration document and said he did so because he thought the address on the document had to match the current address he’d given to Marshmallow. But he said he didn’t intend to do so for any financial gain or benefit, and having recently moved to the UK, was unaware of the rules. In its response to his complaint, Marshmallow said it was Mr A’s responsibility to ensure the details he provided were accurate. It said he was advised before making payment for the policy that the policy would be cancelled if he’d made any misrepresentations and that it might share information with fraud agencies. But Mr A didn’t accept Marshmallow’s response. He said the fraud marker was overly harsh given that he had been unaware of the rules in the UK. So he referred his complaint to the Financial Ombudsman Service. Our Investigator considered the complaint, but didn’t think it should be upheld. He told Mr A Marshmallow had acted in line with the terms of its policy, and hadn’t taken any unreasonable action. Mr A didn’t agree with our Investigator’s opinion, so the complaint has come to me 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. As this is an informal service, I’m not going to respond here to every point raised or comment on every piece of evidence Mr A and Marshmallow have provided. Instead, I’ve focused on those I consider to be key or central to the issues in dispute. But I would like to reassure both parties that I have considered everything submitted. And having done so, I’m not upholding this complaint. I’ll explain why. The terms of Mr A’s policy with Marshmallow say: “If false or inaccurate information is provided and fraud is identified, details will be passed to fraud prevention agencies. Law enforcement agencies may access and use this information. Furthermore, this will result in your policy being cancelled or voided and your claim being repudiated.”

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It further states: “If you or anyone acting on your behalf have intentionally, recklessly or fraudulently concealed or misrepresented any information or circumstance at policy inception, or engaged in any fraudulent conduct, or made any false statement relating to this insurance in support of a claim, or made any claim under the policy which is in any way false or exaggerated, we may: • Terminate the policy with effect from the date of any fraud which occurred during the application process and we may retain the premium”. Mr A has said he had only recently moved to the UK and was unaware of how strict insurance providers were, and that it was quite common in his home country to amend documents like this. However, I’m not persuaded by his comments. Before purchasing the policy, Mr A was given a list of declarations and confirmed these to be accurate. He was then shown the following statement: “You confirm that we have the details we need to assess your risk, verify your identity and prevent fraud. You agree to keep us informed of any changes to this information, and to let us access more information about you from third parties in the future. Any misrepresented information could lead to premium increases, policy cancellation and/or claim repudiation. We might share the information you give us with fraud agencies.” So I’m satisfied that Mr A would’ve been aware, from reading that statement, that he’d need to ensure none of the information or documents he’d provided were misrepresented or fraudulent. And I think he should’ve been aware that altering an official document would’ve constituted a misrepresentation of information. I’ve seen the amended V5 and the original document, and can see that Mr A altered the document so it would look as though it was issued to the address he’d given Marshmallow. So I don’t consider Marshmallow cancelled the policy unreasonably in light of this, or added the CIFAS marker unfairly. Marshmallow was entitled to take these actions if it considered a misrepresentation had taken place and was entitled to share that information with external agencies to prevent fraud. It also made Mr A aware it could do this if any information was misrepresented, and it did so in line with the terms of its policy. Mr A has said he wasn’t given any notice of cancellation, despite Marshmallow’s website saying it would give up to 7 days warning before cancelling a policy. I’ve considered what Mr A has said here, but it doesn’t change my mind. The policy sets out, in the “Fraud” section, that it can be terminated with immediate effect if there’s fraudulent conduct or information has been concealed or misrepresented. I’m satisfied that happened here, so I think Marshmallow had the right to cancel the policy without giving notice. I appreciate that Mr A says he did not intend to defraud Marshmallow, and that this was a genuine mistake, so he considers the addition of the CIFAS marker too harsh. But the terms of the policy are clear, as was the warning given to Mr A before he took the policy out. Marshmallow would not have needed to prove that Mr A had committed fraud – but it would need to have clear and persuasive evidence of it. And based on what I’ve seen, I don’t think it acted unreasonably in relation to the addition of the CIFAS marker, because it had reasonable grounds to believe that fraud had been committed, or attempted, deliberately. Mr A’s intention to defraud would not need to be proven to a criminal standard (i.e. beyond reasonable doubt), but there would need to be evidence of dishonesty and an intention to defraud, for external agencies to be contacted. Based on the evidence I’ve seen, I can understand why Marshmallow considered that the deliberate misrepresentation of facts here

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warranted it notifying external agencies. Mr A is free to complain to CIFAS and the Information Commissioner’s Office if he considers the fraud marker to be incorrect. My final decision My final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr A to accept or reject my decision before 31 March 2026. Ifrah Malik Ombudsman

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