Car insurance refund - extras deducted?

wildheart83

I took out car insurance, and cancelled it 5 days after it started but was still within my 14 day cooling off period but had paid quite a large deposit.

After lots of emails back and forth, I have finally received a reply to the complaint I lodged regarding my refund, but they seem to have added on a huge amount in extra charges that aren't mentioned anywhere in their terms and conditions. Does this sound right?

Here is the email sent:

In accordance with our Terms of Business from the £126.37 paid towards your policy, we have retained a £50.00 commission charge plus £3.00 Insurance Premium Tax on that commission. We have deducted our standard £75.00 cancellation fee plus £4.98 for time on cover between the 7th August 2011 until 13th August 2011 and a pro rata charge of £0.08 for the Legal Expenses cover. As you paid by Direct Debit the set up fee for this service is charged at £17.50. From the above deductions this generates an additional premium of £24.19.

However, as a gesture of goodwill on this occasion, we are happy to offer a resolution to your complaint and are prepared to waive the commission charge of £50.00 and the Insurance Premium Tax of £3.00. The net result is a refund of £28.81.

soos_2

That's daylight robbery! They charge a fortune to get insured and then rip us off if we want to cancel. I'm so angry!!

wildheart83

I couldn't cancel it before the policy started because the reasons for me cancelling didn't become apparent until I had the policy documents, which they didn't send until the policy started. I'm about to phone the FOS and see if they'll take on the complaint.

dunstonh

Their charges are high but that appears to be because there is a brokers charge in there as well as the insurers charge. If they were not waiving the £53, then I would say take it to the FOS. However, with the figure after their goodwill payment, it makes it a figure that the FOS would generally consider fair.

I'm about to phone the FOS and see if they'll take on the complaint.

That isnt how it works.

mikey72

But it's an excellent start, and they'll give you free advice as to what action to take.

vaio

yep, and have a really good read of all the documentation you recieved

wildheart83

It might not be how it works but this has been trundling along since July so I've waited long enough, exhausted their complaints procedure (which seems to vary depending on who emails me from eCar) and I've had enough.
I rejected their offer, reiterated that I'll be taking legal action against them and they've waived the £75 cancellation fee. However their figures don't seem to add up - I paid more than what they're stating and since these extra charges (except the £75 cancellation fee) are missing from their terms and conditions I don't know the basis on which they apply them.

dunstonh

I rejected their offer, reiterated that I'll be taking legal action against them

I suspect that when you see a solicitor, they will put your off that idea as you wont have a leg to stand on.

The FOS will consider fairness (unlike the courts) and may feel differently but generally the FOS expect figure of upto around £50 on the fee plus pro-rata premium (although allow for slightly more in the early period due to that being where all the costs are).

Realistically the charge doesnt look high. Yes the £75 is above the £50 but the FOS did say they look at each case and that was 5 years ago. Inflation increases would see £75 in the ballpark range.

By all means give it a go. You may get lucky but with their offer, I would think the FOS will rule it a fair offer.

mikey72

If they have waived the £75 fee now, and the £50 commission previously, and you have actually paid more than £126.37 what are the figures now?

Badger_Lady

What were the circumstances that meant you had to cancel?

wildheart83

I cancelled cause I didn't agree with the terms of the finance company, but didn't get their terms until 5 days after the policy had started.

I paid my deposit and also the first month's DD, which I had to claim back as they claimed it after it had been cancelled with the bank. But they reckon that the £126.37 is including the first month's DD which they've deducted from the amount that they've offered me, when that's just the deposit.