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  • FIRST POST
    • CueBruce
    • By CueBruce 9th Jun 17, 10:24 AM
    • 2Posts
    • 1Thanks
    CueBruce
    Warning RE: DD payment becoming a loan repayment
    • #1
    • 9th Jun 17, 10:24 AM
    Warning RE: DD payment becoming a loan repayment 9th Jun 17 at 10:24 AM
    For many years I have paid my house insurance by direct debit to Cornhill.

    When I got my renewal notice I noted the premium had marginally increased - so decided to stick with them.

    However, it turns out that Cornhill no longer want to take monthly DD payments...but now require customers to enter into a loan agreement with a sister company: Close Brothers Group. - if they wish to continue paying by DD.

    QUICK OFF THE MARK
    On my renewal date Close sent me an unsolicited email saying I was entering into a credit agreement with it and requested I fill in online paperwork. At first I thought it was a scam as the email was immediately requesting personal banking details!

    However, when I then reviewed the several sheets of paperwork that came with my renewal I did find mention of the Close Group's 'new role' in Cornhill's premium payment system.

    I'm always happy to pay by DD for a product or service DIRECTLY to the company which is providing the service. ..when no additional payment is required as a result of the instalments. I 've always assumed companies factor in the additional costs of instalment plans - to give them an edge over competitors who require immediate payment in full.

    However, Cornhill is now targeting its loyal 'innocent' customers - who've always paid by DD -.by handing their details to a sister company which then turns the Insurance product premium into a Loan Agreement. This means you then have the potential of a negative credit rating being logged because you've taken out a loan!

    Paying off a credit agreement to a third party i.e.Close Brothers - rather than direct premium payments to the insurance provider obviously offers benefits to both Close and Cornhill...

    Fortunately, I spotted the switch from DD premium payment to repayment of a loan to Close Brothers on the day my renewal was due - and so payed the whole premium - upfront - directly to Cornhill.

    I assume this switch has something to do with saving the mighty ALLIANZ group of companies paying tax to the government...but I could be wrong.
    Close Brothers Group certainly are VERY quick to suggest you've already entered into a Credit Agreement with them...as I discovered!
Page 1
    • glentoran99
    • By glentoran99 9th Jun 17, 10:51 AM
    • 4,608 Posts
    • 3,609 Thanks
    glentoran99
    • #2
    • 9th Jun 17, 10:51 AM
    • #2
    • 9th Jun 17, 10:51 AM
    When you pay in installements for something like insurance its always a a credit agreement, all that's changed is who is looking after it, why would it be a negative if you are paying?
    • mrmagooooooo
    • By mrmagooooooo 9th Jun 17, 12:14 PM
    • 93 Posts
    • 66 Thanks
    mrmagooooooo
    • #3
    • 9th Jun 17, 12:14 PM
    • #3
    • 9th Jun 17, 12:14 PM
    What Glentoran said.

    Payments by direct debit or over a period of time for insurance is always a credit agreement either direct with the insurer or with a third party... Mostly third parties.

    The only reason you didn't know about it is because insurance companies didn't tell people in the past, it was just in the terms and conditions that nobody reads. The insurers were told to shape up by the FCA last year which is now why most will make it clear that its a Credit Agreement and what the APR is even if its 0%.

    So that said, just pay the company for your insurance and get on with your life. Even if you change providers you're in the same boat unless you pay in full.
    Last edited by mrmagooooooo; 09-06-2017 at 12:15 PM. Reason: Shocking Spelling and Grammar
    • molerat
    • By molerat 9th Jun 17, 12:35 PM
    • 17,015 Posts
    • 11,194 Thanks
    molerat
    • #4
    • 9th Jun 17, 12:35 PM
    • #4
    • 9th Jun 17, 12:35 PM
    Most of the insurances I have had over the years and chosen to pay monthly have clearly been credit agreements.
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