Dial Direct scam?

conradmum

I've bought car insurance from Dial Direct for the last few years. Last year and this year, though, I've gone through confused.com and got a cheaper quote - same insurer, just a cheaper quote than my renewal notice.
Last year, when I tried to buy the confused.com quote online, I was referred to Dial Direct. After some humming and hawing, they agreed to give me the cheaper quote (thanks, Martin!). This year, I bought the insurance online no problem. However, Dial Direct still charged me for the original renewal notice quote. Two insurance policies, one car.
I phoned up to sort it out and the call centre operator said it was their fault and he would cancel the more expensive policy. I received a cancellation notice dated three days into the commencement of the policy. I then received a letter requesting that I return the insurance certificate.
Fair enough, I should send the certificate back. But my payment hasn't been refunded onto my credit card and now I notice a lot of small print that's bothering me. On the renewal notice it states that they'll take payment if I DON'T contact them. Also, there's a £20 cancellation fee and a rising scale of percentage of fee, starting at 20%. I don't remember agreeing to let them just take payment, and seriously doubt I would ever have done so.
Can they legally charge me for cancelling a policy I didn't agree to take out? Especially when they've sold me another policy for exactly the same car?

dunstonh

Can they legally charge me for cancelling a policy I didn't agree to take out?

You are cancelling the old one and taking out a new one. If you dont notify them that the old one is being cancelled then you are in breach of contract and they are within their rights to charge.

Especially when they've sold me another policy for exactly the same car?

You have bought a second policy for the same car and appear not to have told them you are not going to renew the original policy.

Chances are they will refund the premium with no charge but as it stands, you are creating this problem by not telling them are not going to renew the old policy and proceeding with a new one.

marble

The small print of many policies states that they will automatically renew your policy if you don't contact them before renewal -this is nothing new or underhand. Usually, if the policy renews and you then cancel, you will get charged for the number of days you were on cover, and also a cancellation charge.

Luckily, in your case, you had insurance through the same broker on the same car. The underwriting insurance company will normally issue a full refund if you can prove you had alternative insurance (you can't really have insurance twice for the same car).

I suspect the insurance company may be able to charge you an administration fee (their £20) for issuing documentation and processing your renewal, but even this would fall into a slightly grey area.

I would wait and see what refund you get ... chances are it'll be a full refund without the 20% underwriter premium or £20 admin fee. If you do get charged, write a letter and point out that you have proof of alternative cover and that it is a policy through themselves ... I suspect they will back down and refund everything ... it's such a grey area, it's not worth the hassle for them.

Al

conradmum

Many thanks both of you. I can't believe I've been insuring a car each year for about 9 years now and didn't realise this.
It may be common practice but I don't think it's moral. How many other vendors can automatically charge you for something? It's not as though I've signed a direct debit authorisation. And I object to the insurance company keeping a hold of my credit card details from year to year.
There's no reason for insurers to implement this policy other than to catch out people who are unaware and haven't read the small print, and then charge them for something that perhaps they don't need. Car insurance is the responsibility of the owner/driver, not the insurance company.

dunstonh

but I don't think it's moral.

You are the one playing the system to get a lower price.

How many other vendors can automatically charge you for something?

If you buy something and then go back and buy another one exactly the same, then you would expect to pay again.

It's not as though I've signed a direct debit authorisation.

You have signed a contract though to allow auto renewal. A direct debit wouldnt make any difference and many people get caught out by that. Cancellation of direct debit only cancels method of payment. It doesnt cancel any contract.

There's no reason for insurers to implement this policy other than to catch out people who are unaware and haven't read the small print, and then charge them for something that perhaps they don't need.

Its very useful for the majority that do not shop around each year and know that they have to do nothing to continue their insurance. A number of contracts work this way and its not unique to car insurance.

Car insurance is the responsibility of the owner/driver, not the insurance company.

Contracts are a responsibility as well. If you enter into one, then you need to be aware of what you are doing and your responsibilities when you want to change that contract.

I'm not disagreeing with some of your views but playing devils advocate as to how it is actually considered.

conradmum

dunstonh wrote:

You are the one playing the system to get a lower price.

Is shopping around called 'playing the system' now? How unreasonable of me to try and get a cheaper price!

dunstonh wrote:

If you buy something and then go back and buy another one exactly the same, then you would expect to pay again.

I didn't 'go back and buy another one'. One was 'sold' to me without my requesting it.

dunstonh wrote:

You have signed a contract though to allow auto renewal. A direct debit wouldnt make any difference and many people get caught out by that. Cancellation of direct debit only cancels method of payment. It doesnt cancel any contract.

I didn't sign any contract.

dunstonh wrote:

Its very useful for the majority that do not shop around each year and know that they have to do nothing to continue their insurance. A number of contracts work this way and its not unique to car insurance.

Oh yes - how thoughtful of the car insurance industry to make things easier for us. I should have known consideration was their primary motive.

dunstonh wrote:

Contracts are a responsibility as well. If you enter into one, then you need to be aware of what you are doing and your responsibilities when you want to change that contract.

I think the fact that I was unaware that I had entered into this contract is evidence enough that the fact isn't made clear enough to buyers

dunstonh wrote:

I'm not disagreeing with some of your views but playing devils advocate as to how it is actually considered.

Glad to hear it!

dunstonh

I didn't 'go back and buy another one'. One was 'sold' to me without my requesting it.

That is what you have done. You have taken out a second policy. This is why this has occured. You havent spoken to them and got the terms of the original policy altered. You have commenced a new policy.

I think the fact that I was unaware that I had entered into this contract is evidence enough that the fact isn't made clear enough to buyers

Every insurance policy you take out is a contract.