A Cleator Moor man has blasted insurance giant Aviva for “incompetence” after he was given a payout of more than £100,000 – but was ordered to pay the bulk of it back just a week later because the payment was “a mistake”.

John O’Leary, 58, from Cleator Moor, is a former team leader working in safety equipment at Sellafield.

Along with his wife Angela, he had made plans for the windfall including paying off their mortgage.

However, the dream was quickly snuffed out when the insurers suddenly demanded he repay around £80,000 – and the couple were left with the surreal experience of cancelling their newly-made plans.

Mr O’Leary was diagnosed with Parkinson’s disease last summer. He decided to make a claim with Aviva with whom he had two policies, life insurance and critical illness cover. They awarded him a total of more than £100,000 which was quickly transferred into his bank account.

“They sent us the money,” he said. “They said, ‘you’ve been paid, that’s yours’. They said we were entitled to it. We were going to pay off the mortgage.”

During the initial call, Mr O’Leary even queried the size of the payout but was assured then, and during multiple other calls, that it was correct.

It was at this point they rang Aviva again to confirm receipt of the funds. After checking the system, the woman they spoke to said she would “ring them back”.

“She didn’t say there was an issue,” Mr O’Leary said. “Then they said, they think there’s been a mistake and we might have to pay the money back. They said that people would be given training so it won’t happen again.”

He said that Aviva threatened him with legal action if they didn’t pay the money back. He went to solicitors and consulted the financial ombudsman service, who said in their findings that Aviva made “a great error in this case” but added that a £5,000 compensatory payment from Aviva is “at the very high end of the levels of compensation we’d recommend and is reserved for the most severe of circumstances”.

“It’s terrible what Aviva have done,” Mr O’Leary said. “It’s just incompetence. The ombudsman said they’ve never heard of a case like it.”

An Aviva spokesperson said: “We’re very sorry for the error made regarding the payment of Mr O’Leary’s critical illness claim on his joint life insurance and critical illness policy.

“We paid him the value of what would have been a life insurance claim (which is only payable on the death of a policyholder) in addition to the correct critical illness claim. As the larger payment was incorrect, we asked for Mr O’Leary to return this amount to us, and he repaid the final amount in July 2021.

“We apologise for the trouble and upset caused to Mr O’Leary and we have paid him compensation for this. Mr O’Leary made a complaint to the independent Financial Ombudsman who agreed with our approach and found in our favour.

“We have reviewed our process and will ensure this experience will not be repeated for other customers.”

Mr O’Leary, who with his wife is a foster carer, just finished paying back around £81,000 – minus the £5,000 compensation – last week. He is able to keep a payment of £18,000 which was made against the critical illness cover. He added that he hasn’t heard from Aviva since making his last payment.