Paying for Insurance with Your Debit or Credit Card

The_Rambler

Hi,

I've just discovered something that I thought may be of interest from a security point of view,

Last year I took out some motor insurance on-line and paid for it by debit card. When the insurance was up for renewal I got notification from the company saying that they would renew it automatically at the new rate and giving the debit card number to which they intended to make the charge. Just before the renewal date I contacted them by phone and advised them that I did not want the insurance and they confirmed that they would not claim the money from my account. I wasn't too worried because in the meantime the bank Lloyds TSB had changed my debit card and it now has a new number.

I went on holiday and when I got back I found that the insurance company had actually made a claim and received payment from my bank. I contacted the insurance company and they agreed that they should not have made the claim and agreed to refund the amount, which they did. I also asked them where they got my debit card number from as I had not given it to them but they wouldn't tell me.

Being concerned about my bank account security I contacted Lloyds and they referred me to their Visa office. When I contacted the Visa office they glibly told me that "ALL INSURANCE SOLD ON-LINE HAS IN THE TERMS AND CONDITIONS" (in small print) "THAT YOU ARE AGREEING TO THEM AUTOMATICALLY RENEWING THE POLICY UNTIL THEY ACCEPT YOUR CANCELLATION AND FOR THAT REASON LLOYDS" (they say) "ARE LEGALLY ABLIGED TO AUTOMATICALLY GIVE THE INSURANCE COMPANY YOUR ACCOUNT & CARD DETAILS REGARDLESS OF WHETHER IT IS A DEBIT OR CREDIT CARD". They also confirmed that the insurance company systems have a direct link to the Visa system so that they can look up your card details when they like.

So take out any insurance ONCE on-line and you could be paying for it for as long as the insurance company likes to string you along. Indeed there is nothing to stop an insurance company that you had a policy with a few years ago from deciding to make a claim on your card on the pretext that they had sent you a renewal.

Isn't it nice to see that the banks take such good care of our money?? They are even devising new ways to save us the trouble of spending it, they'll just give it to anyone who asks for it. SO MUCH FOR THE BANKS TELLING US TO KEEP OUR ACCOUNT DETAILS PRIVATE????

I for one will not be paying for any insurance on-line in future, from now on its cheques and nothing else. In the current economic climate any wobbly insurance company could claim payments from ex-customer's accounts just prior to going bust. I know that Visa provide a disputed purchase procedure for you to claim the money back but that only applies to Credit cards, if you use a Debit card you're on your own and your bank are providing the facility for this to happen.

McKneff

If you are cancelling anything, whether on line or not.

DO IT IN WRITING WITH RECORDED DELIVERY OR EMAIL AND GET AN EMAIL RECEIPT.

If not, its your word against theirs

The_Rambler

That's a very good point, thankfully this time around I got my money back without too much fuss, no thanks to the banks.

Astaroth

It is part of the card updater scheme that is intended to bring cards more inline with direct debits to protect consumers rights. Prior to card updater coming online you could not cancel a payment before it was taken (ie cannot say dont accept any payments from Tesco) and so the only way to cancel the reoccuring payment authority was with the vender.

The new system allows you to cancel it with your bank instead (to some degree anyway) and also allows those you havent cancelled to continue even after your card has changed/ account upgraded etc.