RAC Financial Services Limited · DRN-6053862

The complaint Mr T complains that RAC FINANCIAL SERVICES LIMITED (“RAC”) treated him unfairly in connection with a breakdown insurance policy. What happened On 17 July 2025, Mr T took out a breakdown policy through RAC. Later he asked RAC to cancel it. Mr T complained to RAC that it had charged him for cancelling it. By a final response dated 15 September 2025, RAC turned down the complaint. Mr T brought his complaint to us without delay. Our investigator didn’t recommend that the complaint should be upheld. He didn’t think that RAC had done anything substantially wrong. Mr T disagreed with the investigator’s opinion. He asked for an ombudsman to review the complaint. He says, in summary, that: • The sales-journey material is generic and not evidence of what he personally saw. • The creation of the welcome letter dated 17 July 2025 does not establish that it was communicated in good time. • RAC accepts it cannot evidence that the welcome letter or any fee disclosure was ever emailed or delivered to him. • RAC admitted failure to act on his initial request for cancellation. This is relevant to the overall fairness of the outcome. • RAC relies on wording (“up to £25” and “if there is”) that allows discretion. Yet RAC has treated the fee as automatic without any explanation as to how that discretion was exercised. 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. I’ve taken into account relevant law, regulation and good practice. Above all, I have to decide what’s fair and reasonable. RAC’s policy wording included a table showing fees for cancellation. It included the following:

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“Within the cancellation period … If you haven’t used our service … if there is an arrangement and administration fee, we will charge up to £25 of this.” I don’t find that ambiguous. The policyholder would know if there was arrangement and administration fee and if he had used RAC’s breakdown service. The policyholder could expect that a fee of “up to £25” would be a fee of £25. I accept that there might be times when RAC might charge a lower fee, for example equivalent to what the policyholder had already paid. I accept RAC’s evidence that – in order to have bought the policy online – Mr T must’ve followed its online sales journey. That included showing him the following information: “What you’ll pay if you cancel You can cancel your policy at any point. Depending on the point you cancel and if you have used service fees may vary. Full cancellation details…” That provided a link to “Full cancellation details” which included the table showing fees for cancellation. So I’m satisfied that, before he agreed to buy the policy, RAC had provided Mr T with clear information about fees if he cancelled. RAC sent Mr T an email headed “you're covered! Here are your membership details”. It didn’t say anything about cancellation fees. Mr T received that email. I’ve seen an RAC welcome letter to Mr T dated 17 July 2025. It enclosed a breakdown policy schedule. That set out that the arrangement and administration fee for his policy of £55.00. It also stated that the first monthly payment of about £9.00 was due on 1 August 2025. The policy schedule included the following: “If you cancel within 14 days of joining, we’ll charge £25 to cover the arrangement and administration of your policy during this time.” As the welcome letter and attached policy schedule were part of RAC’s standard process, I find it more likely than not that RAC sent them to Mr T. I consider that RAC had done enough, even if Mr T didn’t receive the welcome letter. By an email dated 23 July 2025, Mr T asked RAC to cancel the policy within the 14-day cooling-off period. RAC replied by email dated 29 July 2025, asking Mr T for more information to pass data protection. RAC didn’t receive a response from Mr T. I infer that Mr T had also cancelled the card payment that would otherwise have gone through on 1 August 2025. On 2 September 2025, RAC cancelled the policy for non-payment. RAC asked Mr T to pay £62.02. I infer that this included a charge for time on cover and a £50.00 fee for cancellation outside the cooling-off period. I don’t consider that this was a mistake.

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Mr T contacted RAC. RAC cancelled the policy retrospectively as if it were cancelled within the cooling- off period. It asked him to pay £25.00 rather than £62.02. Overall, I don’t conclude that RAC treated Mr T unfairly. So I don’t find it fair and reasonable to uphold this complaint or to direct RAC to do any more in response to this complaint. My final decision For the reasons I’ve explained, my final decision is that I don’t uphold this complaint. I don’t direct RAC FINANCIAL SERVICES LIMITED to do any more in response to this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr T to accept or reject my decision before 23 April 2026. Christopher Gilbert Ombudsman

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