A chance for all bankrupts to change your life - Your help needed!

alastairq

thank you for your efforts......

4$£&*(£$&*(!

Had some sleep, now I've just about got through the big ones (of course lots of big names kept cropping up through the brokers, the two biggies are AXA and Aviva, they may warrant some extra work once I've got my reply).

Companies to add to my list who I've emailed that letter to:

Jukes Online
Hastings Direct
Thamesbank
Sureterm Direct
Dial Direct
Admiral
Ibuyeco
AXA
Groupama
Marks and Spencer
Elephant.co.uk
Asda Insurance
Insure
Ascot Underwriters
Santander
OneCall
Swiftcover
Magnet
RAC

That's not to say all of these insurers refuse to cover bankrupts, but during price comparison searches they all refused to return a quote if a question about bankruptcy was answered yes.

4$£&*(£$&*(!

I also didn't mention - earlier in the week Chris Pond of the FSA posted his guest comment on these boards seeking our input into the new Financial Capabilities Authority, set to take over the FSA. I emailed this (which has been acknowledged):

I write following your comments via MoneySavingExpert.com this morning. I have tried to use the feedback email address on the MSE website but my email bounced back.

Many home insurers ask customers to declare if they, or anyone in their household, has ever been declared bankrupt. I ran into this problem when my partner moved in with me during 2008 and she was declared bankrupt. Up until that point I had around 10 years of no claims bonuses held, I was viewed as a very good risk and had absolutely no problem getting cheap buildings and contents insurance.

Since then each year I have to commit at least three hours compared to about half an hour previously in trying to obtain competitive quotes. I used to be able to go to the large comparison websites, enter my details and lots of quotes would come up. To give you an example, if answering positively to the question of bankruptcy on GoCompare.com I was only able to obtain quotes from 10 different companies compared to over 60 if I stated no-one in the household has ever been bankrupt. Confused.com returned over 80 quotes without declaring bankruptcy, and just one quote when declaring bankruptcy.

So then I have to lie on the comparison websites about bankruptcy, get the cheapest quotes and start phoning from the top of the list downwards until someone tells me bankruptcy is not a problem. I then have to take this figure to three local brokers to see if they can beat the quote.

This year the cheapest policy came in for me at £191 without bankruptcy. By the time I had whittled down the list the lowest price I could pay was £269. One insurer, Fresh Insurance, tripled their quote.

Yet this is allowed to go on unchallenged. I have taken the matter up with the insurers who are not interested. The price comparison websites blame the insurers. Even the Information Commissioner agrees that their processing of data gets less relevant with time, and the use of a perpetual question could be in breach of the third principle of the Data Protection Act however this area is out of their remit.

If insurers can prove there is a definitive link between risk and bankruptcy I am not set against an increase in premiums, however this increase must have a time limit. It is fundamentally unfair an insurer can ask if anyone ever in the household has been bankrupt, and my policy invalidated if I do not answer truthfully to this question. To give another example, the three main credit reference agencies allow bankruptcy to fall off individuals' records after a period of six years. My proposal is for insurers, their intermediaries and comparison websites, to all have a strict rule they are not permitted to use bankruptcy data beyond six years of being discharged from bankruptcy. Their questions on websites and by telephone must be reflective of this when they are asking for customers to supply this information.

I have been campaigning in this area for two years now and this is something fundamental the new FCA organisation needs to challenge. Increased premiums immediately following bankruptcy may be appropriate. Increased premiums for the lifetime of anyone living in the same household as a bankrupt are not appropriate.

I look forward to your views on this matter.

Ineedaname

Two more absolutely superb missives. Your efforts in this and other matters are not going un-noticed CS.

dojoman

Thanks CS for your hard work and dedication on this matter:T:T:T

4$£&*(£$&*(!

Thanks INAN that's appreciated. If only I could get someone in the industry involved. I tried Martin's suggestion of contacting Christians Against Poverty, they replied this morning with a thanks and we wish you luck but finances are a massive remit and... well you get the rest.

I am a bit hacked off I have to say with the 'big' players in this game. I have emailed who I thought might be appropriate with CAB and have had nil response. Martin said he doesn't know enough about this area and cannot help campaigning but said he would dig out some contacts for me, he hasn't got back to me. Which? have similarly not given me a response.

This isn't a small issue, this is something worth potentially tens of thousands of pounds over a bankrupts lifetime so these big players should be interested. I know Martin only has so much within his remit but even if he just writes a note to the ABI to say he is aware of the work we have put in here and will they keep him posted also, that's all I'd want to try and kick things off. That disheartens me incredibly, the legwork is already here it just needs a big name attaching to it.

Anyway onwards and upwards, Budget is the first to get a reply back to me. They say:

We can confirm that with regards to Bankruptcy it is more of a risk factor to our underwriting insurers and how long ago the bankruptcy announced.

If there is an issue with the quotation with regards to bankruptcy, these are the questions we ask and forward to our underwriting insurers;

Date of bankruptcy?
* Date that bankruptcy spent?
* Type of business that the proposer (or spouse - whoever was declared bankrupt) was employed in at the time of the bankruptcy?
* How long the bankrupt person has been in their current employment?
* What was their occupation at the time of bankruptcy and what is it now?
*
In all instances where a quote/policy refers.

This will determine if we can provide insurance for the individual client.

I have then asked:
Thank you for this information. Could you additionally advise in this case:

How long is it before your underwriters consider a bankruptcy to no longer pose an increased risk factor?

What steps will you consider to ensure the age of bankruptcy is taken into consideration when comparison websites return quotes to ensure the quote is competitive; and in the case of GoCompare.com answering positively to the issue of bankruptcy regardless of length then refuses to provide a quote by Budget?


Let's see if anyone else returns an email today.

4$£&*(£$&*(!

Brit Insurance have got back to me following an email a little while further back. They have mentioned a couple of specific points in relation to my personal situation, then they say:

Lastly, whilst I take on board your comments on a benchmark similar to that used by credit reference agencies and will certainly liaise with our intermediaries and give this due consideration, at present though there are no hard and fast rules with regards to disregarding bankruptcy as a risk issue and so such risks are considered on their individual merits when presented to us by our intermediaries.

I have replied asking them to consider the six year rule credit reference agencies use, and suggest this could be following the date of discharge. In other words that is arguing if they say bankruptcy is a risk, discount it six years after discharge then that way people who get AD get a fair deal, and people who are bankrupt offenders can be identified since they have not yet been discharged.

4$£&*(£$&*(!

Asda's next - Asda@bdml.co.uk - they say:

Unfortunately to obtain a Home Insurance Quotation for your partner who had previously suffered financial difficulties in the past, any quotation would have to be obtained over the telephone.

If you could kindly call our Sales Department on 0800 181 4902 they will be happy to assist you with this.

I reply:
Thank you for your reply. I will be honest, that is not particularly the response I was hoping for since the issue I am highlighting affects bankrupts for the rest of their lives. Simply put, my partner could have had a blemish free financial background for the last 20 years but because of a bankruptcy 21 years ago I would still be unable to obtain a quote online.

Additionally, those using price comparison websites like GoCompare.com are looking for the most competitive deals in a fast time. To give an example of this, when bankruptcy was not declared over 61 companies returned quotes. When bankruptcy was declared just 10 returned quotes - Asda was in the group of 51 who refused to quote due to bankruptcy. Imagine then having to make 51 separate phone calls to obtain the most competitive quote.

I appreciate this issue perhaps goes beyond a customer service enquiry and is more policy related; I would be grateful if you would forward my comments to the relevant policy/legal section for their due consideration and response.

Ineedaname

CitySlicker wrote: »

Anyway onwards and upwards, Budget is the first to get a reply back to me. They say:

We can confirm that with regards to Bankruptcy it is more of a risk factor to our underwriting insurers and how long ago the bankruptcy announced.

If there is an issue with the quotation with regards to bankruptcy, these are the questions we ask and forward to our underwriting insurers;

Date of bankruptcy?
* Date that bankruptcy spent?
* Type of business that the proposer (or spouse - whoever was declared bankrupt) was employed in at the time of the bankruptcy?
* How long the bankrupt person has been in their current employment?
* What was their occupation at the time of bankruptcy and what is it now?
*

I still don't understand the 'risk' though. We are more likely to continue to pay instalments, no more likely to make a claim than any other insured person and what does it matter for contents insurance what our occupation was in years gone by?

By "date that bankruptcy spent" do they mean date of discharge or time period debt was accrued?

I still think a BIG issue is the one over whether anyone in the household has ever been BR. If it's not the insured then where is the additional risk?

MTDancer

Cityslicker you are a star - everyone who has ever been made bankrupt has a debt of gratitude to you.