A burglary claim with a pre-sold laptop, an altered receipt and a spent conviction
On 4 November 2025 Mrs Patel reported a burglary at her home, claiming £28,400: jewellery £14,000, a laptop £2,200, a television £1,800, and £3,000 of clothing and cash (the policy excludes cash above £500). There was no forced entry; she says she left the back door unlocked while putting the bins out. The investigation establishes that the proposal asked about claims in the last five years and about criminal convictions; she answered 'no' to both. She had an escape-of-water claim in 2021 at a previous address, and a 2017 theft conviction that became spent in 2024. The laptop was sold through an online marketplace two days before the burglary using her son's account, and the television receipt appears altered from £1,100 to £1,800. Mrs Patel has now complained about the time taken and threatened to go to the Financial Ombudsman Service.
1. Separate the non-disclosure, the spent conviction and the fraud, and explain the legal consequence of each.
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Separate the three issues; they have different consequences.
1. The non-disclosure of the 2021 escape-of-water claim. This is a consumer household policy, so the Consumer Insurance (Disclosure and Representations) Act 2012 applies, not the Insurance Act 2015. She failed to take reasonable care to answer the claims-history question accurately. The remedy under section 4 and Schedule 1 is proportionate and depends on what the insurer would have done: if it would still have offered cover on the same terms, no remedy; if it would have charged more, the claim is reduced proportionately; if it would have declined, the contract may be treated as terminated and the premium returned. Establish the underwriting evidence before deciding.
2. The spent conviction. Section 4(3)(b) of the Rehabilitation of Offenders Act 1974 means a question about a spent conviction does not have to be answered where the question relates to insurance. Her 'no' is therefore not a misrepresentation the insurer can rely on. Do not build the decision on it - a repudiation on this ground would be vulnerable at FOS.
3. The fraud. The laptop sold two days before the 'burglary' and the altered receipt are not misrepresentation; they are a fraudulent claim. Under section 12 of the Insurance Act 2015 the insurer is not liable for the claim at all, may recover any sums already paid, and may treat the contract as terminated with prospective effect.
The crucial point: the fraud forfeits the entire £28,400, not just the £2,200 laptop. Had the only issue been the 2021 claim, the outcome would have been a proportionate reduction - a completely different result.
2. Set out the evidence and process you would follow before making and communicating a fraud decision.
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Standard of proof and evidence. The civil standard applies, but the evidence must be strong and cogent before alleging fraud. Here: the marketplace sale on the son's account (obtain the listing, the account records and the payment trail), the altered receipt (obtain the original and the retailer's duplicate), the absence of forced entry, and her answers on the proposal. Take a detailed statement from Mrs Patel and from her son, and invite an explanation before any decision - the son may have used her details without her knowledge, which would break the link to her.
The decision letter. It should set out each concern, the evidence, the policy term or principle relied on (section 12 of the Insurance Act 2015 and the fraud condition), the consequences (no payment, recovery of any interim payment, and prospective termination of the policy), and the complaint and FOS rights. Do not use the spent conviction as a reason.
Recovery and referrals. Recover any interim payment, cancel the policy going forward only, notify the Insurance Fraud Bureau, and consider a police report - but not as a substitute for the coverage decision. Check any mortgagee's interest if buildings items are involved.
Record keeping. Log the evidence, the reasoning and the decision date. If the claim is later challenged, the file must show that the insurer considered her explanation rather than assuming fraud.
3. Mrs Patel complains about the delay. Explain how the complaint should be handled alongside the coverage decision.
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Complaint handling runs on a fixed timetable. Under DISP, acknowledge promptly, investigate, and give a final response within eight weeks; if the insurer cannot, it must explain why and give FOS referral rights. The complaint is about the handling, not the outcome, and mixing the two is where insurers get into trouble.
Separate the strands. Explain to her that the fraud investigation is a coverage decision and is not resolved by the complaint process, but that the delay is being investigated. Confirm the dates on file: report 4 November, investigation steps, decision date. If the insurer has taken months without explanation, an apology and a modest goodwill payment may be appropriate.
Keep the Ombudsman decision in view. FOS will look at whether the insurer had reasonable grounds for suspecting fraud, whether the investigation was proportionate, and whether the customer had a chance to respond. It will not look kindly on a decision resting partly on a spent conviction.
Do not lose the coverage position. A goodwill payment for delay does not concede the claim. Keep the two letters separate, and do not let complaint handling delay the section 12 decision beyond what the evidence requires.