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  • FIRST POST
    • pvt
    • By pvt 12th Oct 16, 1:52 PM
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    pvt
    Ladybird Insurance - Cancellation Charge before Policy start date
    • #1
    • 12th Oct 16, 1:52 PM
    Ladybird Insurance - Cancellation Charge before Policy start date 12th Oct 16 at 1:52 PM
    Dear daughter found this insurer (which answers the phone as Fresh Insurance) through a comparison site offering a competitive quote. Called up, went through the usual hard sell for extras (all of which she resisted), and then paid the premium quoted.

    On receipt of the Policy documents we feel some of the Ts&Cs are unsuitable/unacceptable, and also based on negative feedback on the web. So she called back today to cancel the policy BEFORE it takes effect.

    She has been told they will charge a £60 booking fee for cancelling the policy as "the work has been done to set it up".

    The information on their website clearly states that if a policy is cancelled within 14 days, and prior to the insurance commencing, the entire "premium" is refunded.

    There seem to be some weasel words being used around the term "booking fee" as opposed to "premium", however there is nothing anywhere to suggest the premium is £XX and a booking fee of £YY, just a single total amount.

    We plan to make a formal complaint to them in writing, but before doing so wondered of anyone has any insight - can an insurer make such a charge prior to the policy coming into force?
    Optimists see a glass half full
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Page 1
    • Quentin
    • By Quentin 12th Oct 16, 1:56 PM
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    Quentin
    • #2
    • 12th Oct 16, 1:56 PM
    • #2
    • 12th Oct 16, 1:56 PM
    Cancelling prior to the policy starting doesn't mean you don't pay cancellation fees.


    This should all be set out in the policy docs, and if there is no mention of any fees to pay on cancelling you have grounds to complain.


    Their complaints procedure will be set out in the policy docs
    • paddyandstumpy
    • By paddyandstumpy 12th Oct 16, 2:02 PM
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    paddyandstumpy
    • #3
    • 12th Oct 16, 2:02 PM
    • #3
    • 12th Oct 16, 2:02 PM
    Fresh are a Broker. They have provided a service to you for which they are getting paid a commission by the insurer. By cancelling, they are losing that commission, despite them providing you a service. They've got the acquisition fee to pay the comparison site (these are normally about £50!!).
    This is why they charge a cancellation fee.
    The insurer will return the full premium to the Broker, who will deduct a fee and refund you the balance.
    Yes they can make this charge.
    • pvt
    • By pvt 12th Oct 16, 2:05 PM
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    pvt
    • #4
    • 12th Oct 16, 2:05 PM
    • #4
    • 12th Oct 16, 2:05 PM
    Thanks Quentin, The policy docs had not been received prior to the policy being paid for.

    Paddy, the call was made to "Ladybird Insurance", she claims there was no mention made of them being a broker and there being a fee.
    Last edited by pvt; 12-10-2016 at 2:09 PM.
    Optimists see a glass half full
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    Engineers just see a glass twice the size it needed to be
    • dunstonh
    • By dunstonh 12th Oct 16, 2:43 PM
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    dunstonh
    • #5
    • 12th Oct 16, 2:43 PM
    • #5
    • 12th Oct 16, 2:43 PM
    Cancellation charges are allowed within the cancellation rights period. The fact the insurance commencement date has not occurred yet does not matter. There is no issue with cancellation fees as long as they match their quoted terms.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • pvt
    • By pvt 12th Oct 16, 3:01 PM
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    pvt
    • #6
    • 12th Oct 16, 3:01 PM
    • #6
    • 12th Oct 16, 3:01 PM
    I've searched through all the documents that they sent (after the payment was made) and also trawled their website. I can find no reference to a broker fee.

    However both the policy wording:

    If at the date of cancellation your policy has
    not yet commenced you will receive a full
    refund from us

    and the keyfacts:

    where cover has not commenced prior to the end of this 14 day period, you will be entitled to a full refund of the premium you have paid

    So I guess this will come down to what was said on the phone call.
    Last edited by pvt; 12-10-2016 at 3:04 PM.
    Optimists see a glass half full
    Pessimists see a glass half empty
    Engineers just see a glass twice the size it needed to be
    • Quentin
    • By Quentin 12th Oct 16, 3:11 PM
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    Quentin
    • #7
    • 12th Oct 16, 3:11 PM
    • #7
    • 12th Oct 16, 3:11 PM
    I've searched through all the documents that they sent (after the payment was made) and also trawled their website. I can find no reference to a broker fee.....
    .
    Originally posted by pvt
    You have missed this on their website regarding their charges if you cancel before the policy starts:


    Within the first 14 days or before the policy starts:


    You have the right to cancel within 14 days of when you purchase your new policy, or from when you receive your policy documents, whichever is later, and within 14 days of renewal date for renewed policies. The insurers will pay a pro-rata refund of premium, subject to a minimum charge, and we will refund any policy set-up charges. We will deduct a cancellation fee of £60 from the total refund to cover our costs.
    • pvt
    • By pvt 12th Oct 16, 3:24 PM
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    pvt
    • #8
    • 12th Oct 16, 3:24 PM
    • #8
    • 12th Oct 16, 3:24 PM
    Thanks Quentin - I'm curious where you found that, I couldn't.

    The sequence of events is:

    - search engine returned a list of policy prices;
    - chose the one from Ladybird and clicked "buy online";
    - came to a page that said you must ring in person to set up a new policy;

    I don't believe the wording you've quoted was on any of those pages, nor was the charge mentioned by the agent she spoke to.
    Optimists see a glass half full
    Pessimists see a glass half empty
    Engineers just see a glass twice the size it needed to be
    • paddyandstumpy
    • By paddyandstumpy 12th Oct 16, 3:39 PM
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    paddyandstumpy
    • #9
    • 12th Oct 16, 3:39 PM
    • #9
    • 12th Oct 16, 3:39 PM
    Paddy, the call was made to "Ladybird Insurance", she claims there was no mention made of them being a broker and there being a fee.
    Originally posted by pvt
    Why would you think a Broker is obliged to tell you that they are a Broker?

    I'm sure they will have said something along the lines of "you agree to proceed on limited information and full documents will be sent".
    If you are saying they didn't tell you about this, you need to complain to them, they will tell you what was/wasn't said and can steer you very quickly to where they advised you of this.

    If you are unhappy with their response to your complaint you have the right to then escalate it to the FOS (Financial Ombudsman Service) within 6 months of the receipt of your response. But the FOS won't listen to your complaint before you have exhausted the Broker's complaint procedure.

    Is your complaint that there is a fee, or that you say you weren't aware of it?
    • Quentin
    • By Quentin 12th Oct 16, 3:40 PM
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    Quentin
    Thanks Quentin - I'm curious where you found that, I couldn't.......
    Originally posted by pvt
    http://www.ladybirdinsurance.co.uk/terms-and-conditions/
    • pvt
    • By pvt 12th Oct 16, 5:35 PM
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    pvt
    Why would you think a Broker is obliged to tell you that they are a Broker?
    Originally posted by paddyandstumpy
    To justify charging a Broker's fee perhaps?

    I'm sure they will have said something along the lines of "you agree to proceed on limited information and full documents will be sent".
    Originally posted by paddyandstumpy
    So you feel a cancellation fee you were not aware of at that point would still be reasonable?

    If you are saying they didn't tell you about this, you need to complain to them, they will tell you what was/wasn't said and can steer you very quickly to where they advised you of this.
    Originally posted by paddyandstumpy
    Agreed, and I guess a recording of the call will reveal this.

    Is your complaint that there is a fee, or that you say you weren't aware of it?
    Originally posted by paddyandstumpy
    The latter. And the fact that the keyfacts and policy documents make no mention either.
    Optimists see a glass half full
    Pessimists see a glass half empty
    Engineers just see a glass twice the size it needed to be
    • paddyandstumpy
    • By paddyandstumpy 12th Oct 16, 5:54 PM
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    paddyandstumpy
    The key facts and policy book belong to the insurer, the fee is charged by the broker.
    As I mentioned the Broker will still have to pay the comparison site for you purchasing that policy. That would have been paid from the commission which forms part of the premium you paid. As you've cancelled, they've recouped that cost.
    The fee is only charged as you've cancelled.
    • pvt
    • By pvt 12th Oct 16, 7:04 PM
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    pvt
    The key facts and policy book belong to the insurer, the fee is charged by the broker.
    As I mentioned the Broker will still have to pay the comparison site for you purchasing that policy. That would have been paid from the commission which forms part of the premium you paid. As you've cancelled, they've recouped that cost.
    The fee is only charged as you've cancelled.
    Originally posted by paddyandstumpy
    Except the policy was not bought "online", it was bought as a result of the subsequent telephone call.

    And had the telephone call taken place and DD decided not to pay up and take the policy, are you suggesting the broker would then be £50 out of pocket for the referral fee?

    So there must be a mechanism for the broker to say "this referral resulted in a sale - here's your £50" and "this referral did not result in a sale - go swivel". Because that's what happens with cashback sites like Topcashback and Quidco.

    I think there's a world of difference between cancelling a policy because of a change of mind or change of circumstances, and cancelling a policy because you're not happy with exclusions and conditions in the policy wording you hadn't had an opportunity to see until you paid up.

    As regards who bears the loss - it comes down to whether the broker is acting as DD's agent or the insurer's agent. My argument is that, if it's the former, DD wasn't made aware of that.
    Optimists see a glass half full
    Pessimists see a glass half empty
    Engineers just see a glass twice the size it needed to be
    • rs65
    • By rs65 12th Oct 16, 7:18 PM
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    rs65
    So you feel a cancellation fee you were not aware of at that point would still be reasonable?
    Originally posted by pvt
    My understanding is that they cannot enforce a fee that you were not previously aware of.
    • rs65
    • By rs65 12th Oct 16, 7:20 PM
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    rs65
    Why would you think a Broker is obliged to tell you that they are a Broker?
    Originally posted by paddyandstumpy
    You have to be joking? The relationship between parties is fundamental.
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