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Cant they take money from my Visa debit card?

Hi, I recently paid a deposit (£90) by phone with my Visa debit card for insurance through a rather unknown insurance company as it was an emergency and they gave me the best quote.:j

I set up the direct debit a little later. Shortly afterwards (within 2 weeks, my car developed a major engine fault so I immediately told them that I would not be using the car as it was economically unviable to repair the problem.

I cancelled my insurance immediately, and went through all the correct protocols of sending back the policy docs asked for etc. The car was insured for just under 4 weeks in total. I cancelled all the direct debit instructions online at the same time.

They have today sent me a letter saying that I owe them £154.00 and will be taking from the card that I paid the deposit with with if I do not pay it within 10 days.:mad:

My questions are:
1) Can they do this?

2) How can I stop them doing it

Thanks for any help offered, Tom. :money:
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Comments

  • Meepster
    Meepster Posts: 5,955 Forumite
    1) Yes, they can.

    2) You could cancel your card, to stop them taking the payment. But they'll still expect payment. They'll eventually pass it onto a debt collectors...

    Is there a reason you don't think you should pay for it?
    If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family anatidae on our hands

  • If you only authorised them to take the deposit from the debit card, then I don't see how they can take any more than that (though they might try - you could dispute it).

    Of course it might be in the T+Cs that you authorise them to use the card - but the fact of their acceptance of a DD instruction suggests that this was the agreed method for the balance.

    Whether you are entitled to cancel the insurance depends on what was agreed. It is quite possible that despite the car being no longer viable, the payment is still due.
  • tom24
    tom24 Posts: 5 Forumite
    Meepster wrote: »
    1) Yes, they can.

    2) You could cancel your card, to stop them taking the payment. But they'll still expect payment. They'll eventually pass it onto a debt collectors...

    Is there a reason you don't think you should pay for it?

    Yes, I paid £90 for less than 30 days cover which I feel is more than enough. Thanks for your input, Tom.
  • joerugby
    joerugby Posts: 1,180 Forumite
    Part of the Furniture Combo Breaker
    Have you checked the T&Cs of the insurance policy with regard to early termination? What do they say? This will determine whether your card should be charged.
  • Meepster
    Meepster Posts: 5,955 Forumite
    tom24 wrote: »
    Yes, I paid £90 for less than 30 days cover which I feel is more than enough. Thanks for your input, Tom.

    Well, you may think that's enough, but exactly how much do you think it costs them to set up the insurance for you? Just because YOU want to cancel the insurance, doesn't mean they haven't incurred costs setting the policy up for you...

    What do their T&C's say???
    If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family anatidae on our hands

  • tom24 wrote: »
    Yes, I paid £90 for less than 30 days cover which I feel is more than enough.

    Car insurance usually has a 2-week cooling-off period. Thereafter, you have entered into a contract for a whole year.

    Whether you like it or not, the insurance is entitled to the whole year’s premium.
  • joerugby wrote: »
    Have you checked the T&Cs of the insurance policy with regard to early termination? What do they say? This will determine whether your card should be charged.

    I disagree. All that matters with respect to the card is what was agreed to be charged to the card. If it was agreed that only the deposit would be put on the card, then that is all they are entitled to charge to the card regardless of whether more is owing.
  • Degenerate
    Degenerate Posts: 2,166 Forumite
    I disagree. All that matters with respect to the card is what was agreed to be charged to the card. If it was agreed that only the deposit would be put on the card, then that is all they are entitled to charge to the card regardless of whether more is owing.

    Indeed. Also, no small print in the contract can override the requirement for authorization to take a larger amount. This would only be legit if it was explained on the phone, at the time the deposit was taken, that the customer was also giving authorization for any outstanding balance to be taken should the DD fail.

    Attempting to charge the card without this authorization is outright criminal fraud, regardless of any amount that may be legally owed under the termination conditions of the insurance contract. If money is owed, their proper route to recover it is via court action.
  • joerugby
    joerugby Posts: 1,180 Forumite
    Part of the Furniture Combo Breaker
    Degenerate wrote: »
    Indeed. Also, no small print in the contract can override the requirement for authorization to take a larger amount. This would only be legit if it was explained on the phone, at the time the deposit was taken, that the customer was also giving authorization for any outstanding balance to be taken should the DD fail.

    Attempting to charge the card without this authorization is outright criminal fraud, regardless of any amount that may be legally owed under the termination conditions of the insurance contract. If money is owed, their proper route to recover it is via court action.

    Practices like this are commonplace in certain sectors such as hotels (e.g. where you might have "forgotten" to pay the minibar) and car rental (for damage to the car noted after drop off) and I am not really surprised they exist in the lower reaches of the insurance industry too.

    If the late charge is in line with the T&Cs of the contract then I'm afraid you are probably stuffed.
  • Degenerate
    Degenerate Posts: 2,166 Forumite
    joerugby wrote: »
    Practices like this are commonplace in certain sectors such as hotels (e.g. where you might have "forgotten" to pay the minibar) and car rental (for damage to the car noted after drop off) and I am not really surprised they exist in the lower reaches of the insurance industry too.

    If the late charge is in line with the T&Cs of the contract then I'm afraid you are probably stuffed.

    Nope. In the hotel/car hire scenarios, you are told at the time of check in/pick up that you are granting authorization for these charges. In many hotels they actually place an authorized transaction on your card to hold the funds, then cancel it when you check out and pay whatever is owing.

    It sounds like the OP agreed only to pay a £90 down payment by card over the phone, and was not asked to authorize anything more. The remainder of the bill was to be settled by direct debit. He cannot be held to T&Cs in a contract he hadn't seen yet. Unless it was explained and agreed over the phone when he authorized the transaction, they cannot legally take any more from the card.
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