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Secret watchdog decision raises critical concerns

Online proposals for critical-illness insurance are open to abuse because the ombudsman can question the contract, says exIFA Brian Lentz.

The case concerns a woman who was told by her GP of a lump in her breast on the morning of March 7 and visited an IFA on the afternoon of the same day.

She took out a joint-life critical-illness policy which was completed online by the IFA. When asked if she had been referred to a doctor or other medical specialist, she said no.

A diagnosis of breast cancer was made in April and the insurer rejected her claim on grounds of material non-disclosure. But the Financial Ombudsman Service found in favour of the consumer as she had not seen a hard copy of the policy proposal, saying most people find it difficult to digest information when it is only presented electronically.

The FOS has not released details of the case into the public domain and will not comment.

Lentz says: “Online proposal forms lend themselves to abuse as it is easy not to complete them accurately. In this case, the FOS decision was wrong but the case has wider implications and you have to ask what else the FOS has decided that no one else knows about.

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