Can Swinton Do This?

CelticStar

I've just had to renew my car insurance and after all the usual searches the lowest quote appeared to be Swinton. I filled in all my details on the search engine and then clicked through to their website and filled in all the extra details that they required. Two days later I received the paper details of my policy (I had paid for it in full when I took it out) and discovered that the mandatory excess amount was £450 - £200 pounds more than I required. This was not made clear when I applied online.

I telephone Swintons and they said that they couldn't lower the mandatory amount and that I should just cancel if I didn't want the policy - I knew that I could do this under the distance selling regulations anyway. I then cancelled the policy and asked them to refund my payment to my card and send me confirmation of cancellation.

Today, I received their confirmation of cancellation and a letter informing me that they had refunded my card - minus a £20 'administrative fee! Is this legal? I feel quite annoyed about it, particularly when no mention was ever made of an administrative fee and this wasn't a cancellation of the policy after the cooling off period.

Thank you for any help received.

noh

There is a mention of a fee in their T+Cs here http://www.swinton.co.uk/terms/

"Your right to cancel your insurance.
You have a right to cancel any insurance you buy through us and to recover any payment made (except as stated below). You can do this by giving notice to your branch (whose address is shown on the covering letter) within 14 days of your receipt of the policy document.
If you do exercise this right to cancel your insurance, you will be charged by the insurer for the service provided up to the point of cancellation. We will also make a cancellation charge of £45.00 except as shown in the 'service charges' table overleaf. You will not be entitled to a refund of the service charge or credit card handling charge made by us for arranging your insurance.
Further, if you exercise this right to cancel your motor insurance, any Driver's Legal Protection you hold will also be cancelled."

But as far as I can see it should be £10 for a policy taken out online.

Nigel

dunstonh

I knew that I could do this under the distance selling regulations anyway.

Which dont apply to insurance. So, you have no rights there.

minus a £20 'administrative fee! Is this legal?

Of course it is. It's in their published T&C. It's an acceptable charge in the eyes of the regulator as work has been done and they are not going to get the profit they would have done had you continued the policy.

this wasn't a cancellation of the policy after the cooling off period.

The cancellation period does not waive your rights to pay for cover had to date. Some will waive any charge. Some will charge for x number of days for cover. Swinton charge a blanket £20 cancellation fee.

mic200202

I'm afraid I would disagree with my colleague in this case.The rules that apply are via the DMD (Distance Marketing Directive). The rules stipulate (Under ICOBS section 3),that the firm must provide you in a durable medium (ie in writing) the contractual terms and conditions in good time before the conclusion of the contract.Also the performance of the contract must not start until the customer has given his approval. In your case, I would not see they have keep to the rules here, and, since you did not give approval after seeing the T&C in writing, the contract should not apply,and in fact be voided,with a complete refund. Additionally, under cancellation rights (section 7 ICOBS) you have the right to cancel without penalty and without reason within 14 days from the receipt of the T&C. If they insist on not refunding you money, I would complain in writing to them,then if not satisfied,take this to the Financial Ombudsman. I would think the firm is at least under the treating customers fairly,obliged to ensure that such things as excess's which clearly affect the cost are clearly pointed out on quotes prior to allowing a customer to sign up.Its not good enough to bury this in with small print T&C's elsewhere for him to discover. This also points out that the buyer must beware of taking out such products without advice and based primarily on price.Car Insurance is not a simple product (look at what happens when you need to claim) and should not be marketed as such.Hope this helps.

dunstonh

I'm afraid I would disagree with my colleague in this case.

No disagreement. You are quoting the correct rules. The OP is quoting different rules.

Swinton publish their T&C on their website and it was purchased via their website. So, full disclosure was available.

Additionally, under cancellation rights (section 7 ICOBS) you have the right to cancel without penalty and without reason within 14 days from the receipt of the T&C.

Swinton are brokers (intermediary). They are allowed to make the charge. http://fsahandbook.info/FSA/html/handbook/ICOBS/7/2

7.2.3 covers Swinton

mic200202

An interesting one Dunstonh.The T&C are there ok, but does that constitute a durable medium to the customer?
On looking at your link,7.2.2 section 3 says 'it must not charge a customer if it started the performance of the contract before the expiry of the cancellation period without the customers prior request'... I can understand a charge if the contract has commenced and outside the cancellation period but not in this case. They have obviously not given due care to ensuring the customer was aware of the policy excess,the client should not be penalised for this.

minimike2

Im confused.

No one "requires" an excess. We would all love not to have one. The compulsary excess is dictated to you, not chosen by you (you can choose to have additional voluntary excess should you wish).

The compulsary excess will have been displayed before you purchased the policy, so why should Swinton incur a financial loss from you not ready the policy details before buying by not charing the admin fee?

dunstonh

An interesting one Dunstonh.The T&C are there ok, but does that constitute a durable medium to the customer?

I think the rules dont really work that well with online purchasing as it requires the client to print the docs and of course not all will.

On looking at your link,7.2.2 section 3 says 'it must not charge a customer if it started the performance of the contract before the expiry of the cancellation period without the customers prior request'... I can understand a charge if the contract has commenced and outside the cancellation period but not in this case. They have obviously not given due care to ensuring the customer was aware of the policy excess,the client should not be penalised for this.

It is in their key facts document which is meant to be read before the application starts. Remember that the fee Swinton take is not the insurance contract but provision of the broker service. This is how they get round the rules. No different from a mortgage adviser on fee basis still being able to charge a lower fee if the mortgage doesnt proceed or a fee basis IFA where you dont follow advice or no product is bought.

CelticStar

Thank you everyone for your comments. I did realise after posting this last night that the DSR do not apply in this case - after reading up on them online.

The thing that has annoyed me about this is that the policy was not due to start until 28/01/09 so, effectively, they had been paid in advance. In addition to this, I was not warned by the person that I spoke to at the branch that there was an administrative fee applicable, she actually said: "you still have time to cancel the policy." It is interesting that, as a broker, different rules apply to them regarding the fee.

I agree that I should have read the T & Cs and terms of the policy more carefully but as soon as I read the documents in paper form I noticed them so I think it indicates that, online, they are not as easy to read or notice.

It seems that I have no real recourse so I suppose it is just a case of 'you live and learn' and don't take out policies late at night unless you are prepared to read all the small print online in minute detail.

jamie1234_2

You can cancel the policy within fourteen days and receive a full premium refund as the fourteen days is deemed 'days of grace', in which you have to time to change your mind about the insuranc policy. This does not apply to all insurance policies but it does to motor. Swinton however may still charge you their admin fee.

A lot of brokers now charge fees (a lot still dont!), any inline with FSA regulations they do not have to disclose their fees - most dont..

Another option instead of cancelling the policy and having to incurr a admin fee would be to ask Swinton to adjust the excess, this should have too much of an impact on the quotation. Bear in mind that Swinton are a broker so they could just switch the insurance company.

CelticStar

minimike2 wrote: »

Im confused.

No one "requires" an excess. We would all love not to have one. The compulsary excess is dictated to you, not chosen by you (you can choose to have additional voluntary excess should you wish).

The compulsary excess will have been displayed before you purchased the policy, so why should Swinton incur a financial loss from you not ready the policy details before buying by not charing the admin fee?

You choose your mandatory excess by shopping around until you find an insurer with a policy (including excess charge) that suits you. Voluntary excess is different obviously but there is always an element of choice when shopping for a policy, whatever the terms.

The compulsory excess was shown, but I would say that it wasn't sufficiently noticeable. The emphasis was on the 'cashback' element and the bottom line premium. It was much more clearly shown when I read the paper documents, at which point I cancelled the policy - and let's face it, it does not cost Swinton £20 to cancel a policy, they merely print the online application off and put it in the post. As I said earlier though, it has been a lesson in looking carefully at the smallprint before accepting a policy, it has also had the knock on effect of making sure I never take out a policy with Swinton again.

jamie1234 wrote: »

Another option instead of cancelling the policy and having to incurr a admin fee would be to ask Swinton to adjust the excess, this should have too much of an impact on the quotation. Bear in mind that Swinton are a broker so they could just switch the insurance company.

I asked Swinton (on receipt of the paper documents) whether I could adjust the excess and they said they would only lower it to £400 from £450. I thought this was too high an excess for me. I have many years' no claims bonus and this, along with other factors, means that my excess is usually only about £200 (regardless of insurer). My suspicion is that Swinton's policies have such a high excess in order to dissuade people for claiming for more minor knocks and bumps - which is how they are able to fund the lower priced policies.