automatic renewal

lisyloo

Continuous card authority is not relevant to auto renewal, otherwise the renewal would be cancelled by cancelling the means of payment.

It very often goes hand-in-hand as many people pay by card these days (some companies don't accept cheques).
You CANNOT unilaterally cancel a continous card authority (like you can a direct debit). Cancelling a card does not cancel the transaction, Visa/Mastercard are actually legally obliged to accept them from retailers (as authorisation has been given) so it's not their fault. This is why I don't use them. If you cancel the card you will still get a bill and if you have current or savings accounts with the same bank then they could get the money that way (most if not all banks have that in their Ts&Cs).
You have to ask the retailer to cancel and the unscrupulous ones simply won't so you really can be stuck.
At least with a DD you have the DD guarantee and can unilaterally cancel (even if you still owe the money).
In practice it's extremely relevant to a lot of the people who have issues as a lot of people pay by credit/debit card.
You cannot make a fraud claim as it was authorised.
Personally I think it's very unwise to authorise transactions of an unknown amount in advance, which is why I don't do it.

mikey72

lisyloo wrote: »

It very often goes hand-in-hand as many people pay by card these days (some companies don't accept cheques).
You CANNOT unilaterally cancel a continous card authority (like you can a direct debit). Cancelling a card does not cancel the transaction, Visa/Mastercard are actually legally obliged to accept them from retailers (as authorisation has been given) so it's not their fault. This is why I don't use them. If you cancel the card you will still get a bill and if you have current or savings accounts with the same bank then they could get the money that way (most if not all banks have that in their Ts&Cs).
You have to ask the retailer to cancel and the unscrupulous ones simply won't so you really can be stuck.
At least with a DD you have the DD guarantee and can unilaterally cancel (even if you still owe the money).
In practice it's extremely relevant to a lot of the people who have issues as a lot of people pay by credit/debit card.
You cannot make a fraud claim as it was authorised.
Personally I think it's very unwise to authorise transactions of an unknown amount in advance, which is why I don't do it.

And therin in the whole point of the insurance companies continuous autorenewal.
If you cancel the DD, the insurer merely states they have re-insured you, and attempts to sell the debt to a collection agency.
So any form of continuous payment is completely irelevant.

lisyloo

So any form of continuous payment is completely irelevant.

I don't agree with you.
The method of payment often affects whether your are on auto-renewal or not.
So for example if you pay by cheque you probably won't be auto-renewed.
An insurer could theorectically choose to auto-renew you and can go after you with debt collection agencies, CCJs, balliffs etc. but most businesses won't plan to operate that way for obvious reasons.
The same reasons (cost/time/hassle/stress) are why no-one has taken a test case on this when it's a lot easier to buy a diary and spend 75p on recorded delivery :-))

If you think going to court and letting a judge decide is no hassle at all, then why haven't you challenged this issue in court yet?
I too think it would be interesting and I would like to see you do it - or were you hoping to come across a like minded, bored, millionaire to do it for you? :-)

mikey72

lisyloo wrote: »

I don't agree with you.
The method of payment often affects whether your are on auto-renewal or not.
So for example if you pay by cheque you probably won't be auto-renewed.
An insurer could theorectically choose to auto-renew you and can go after you with debt collection agencies, CCJs, balliffs etc. but most businesses won't plan to operate that way for obvious reasons.
The same reasons (cost/time/hassle/stress) are why no-one has taken a test case on this when it's a lot easier to buy a diary and spend 75p on recorded delivery :-))

If you think going to court and letting a judge decide is no hassle at all, then why haven't you challenged this issue in court yet?
I too think it would be interesting and I would like to see you do it - or were you hoping to come across a like minded, bored, millionaire to do it for you? :-)

As to the method of payment, it's irrelevant if the insurer states they will autorenew.
They don't really need you to agree or not.
As to your understanding of how the legal system works, I can't go to court, as it hasn't happened to me, as I said earlier.

mikey72 wrote: »

I've never seen any test case proving it was legal or not.
In principle the aurgement that you agree at inception sounds fair, until you realise there is never any cost advised beforehand.
It's only stated when the renewal happens, or maybe a week or two before. The fact the cost is always substantially higher to renew, than to take out a new policy renders it unfair, as even the FOS mention the initial costs of setting up a policy, these aren't repeated at renwal, so in theory it should be cheaper.
So as an unfair contract, it seems a prime example.
The simple excuse of the insurer that they sent the letter, and if you didn't recive it, hard luck, can always be countered with the refusal being sent, but the insurer not receiving it.
Insurers never seem to accept that though.
So again, an imbalance of the contract.
I've never had an autorenwal happen to me, but I always refuse by letter, with proof of posting, so it'll need someone else to look at the contract in court.

premtwinmum

Hi, first post so hope I don't mess this up!
Our travel insurance was unable to automatically renew because the card from the previous time was now out of date. We got a letter asking for alternative payment and my husband told me to ignore as if they would not renew without payment we would allow it to cancel. The idea being we could shop around at our convenience. Eventually the policy was cancelled but we are now charged the entire amount for the insurance as they say they renew it before payment. Do I have a leg to stand on since I didn't cancel the insurance or pay for it either? Help!

They won't allow me to pay the amount and be insured until the original expiry date (nov this year)

lisyloo

Hi mikey, Sorry I didn't get back to you.

As to the method of payment, it's irrelevant if the insurer states they will autorenew.

I agree, it's up to the insurer. But often for practical reasons they tend to autorenew on policies where it's easy to collect the payment.

They don't really need you to agree or not.

Of course not, but generally because they are running a business they are going to chose cost-effective processes.
CCA (continuous card authority) is great (for them) because they have authorisation up front and you can't stop it even if you cancel the card.
That's why I don't use CCA. I prefer DD as I can cancel it.

As to your understanding of how the legal system works, I can't go to court, as it hasn't happened to me, as I said earlier.

I do understand how the legal system works in that regard.
If you wanted to take a test case, you would first have to buy the policy that put you in the situation, then you could take the relevant legal action.
That might cost you a little bit of money on the premium.
If I felt as strongly as you did I'd get a group together and put a few quid in each for one person to generate the test case.

dunstonh

We got a letter asking for alternative payment and my husband told me to ignore as if they would not renew without payment we would allow it to cancel.

Unfortunately, that is an incorrect assumption. The payment method is not linked to the cancellation of the policy.

Do I have a leg to stand on since I didn't cancel the insurance or pay for it either?

Technically, you didnt cancel the policy. So, they continued to offer service until such time that they void the policy due to non payment and then come after you for the debt.

it also means you now have an extra declaration to make on future proposals. The question that asks "have you ever had a policy cancelled by an insurer" (or words to that effect) now means you have to say yes and declare that you have had this one cancelled due to non-payment.

The best you can do is play to their goodwill. If you find the front line staff are not budging, then ask to be put through to a supervisor. The front line staff rarely have any discretion. Whereas those behind the scenes do. Ultimately, you could ask to be put through to the complaints team. Whilst this is totally your error, the complaints team can often agree scenarios which no-one else can. So, the option to reinstate and pay the amount outstanding may then become available and that would avoid the cancelled by insurer issue as well as the policy would no longer be cancelled.

lisyloo

my husband told me to ignore as if they would not renew without payment we would allow it to cancel

I am afraid he was wrong.
Cancelling payment is not cancelling a contract. It's simply not paying.

as they say they renew it before payment

I would first ask them to show you where you agreed to auto-renew.
If they can and you did sign up, I'm afraid you agreed.
If they didn't then make a complaint and hopefully they will drop it.

Do I have a leg to stand on since I didn't cancel the insurance or pay for it either?

Depends whether you orignially agred to the policy renewing.
You have to first establish this.
You need to ask them to tell you where you signed up and dig out any copies of your documentation.

You may have a bigger problem now though as you will have to declare you've had insurance cancelled, so you've got a black mark.
Don't ignore letters, deal with them.
If there is anyway you can avoid the cancellation then do so, because you will have to decalre this forever. This may barr you from some on-line quotes making it difficult and could also mean you are refused or charged more because you were cancelled through non-payment and insurers don't like that. Try to get the cancellation annulled if you can.

premtwinmum

lisyloo wrote: »

I would first ask them to show you where you agreed to auto-renew.
If they can and you did sign up, I'm afraid you agreed.
If they didn't then make a complaint and hopefully they will drop it.

Depends whether you orignially agred to the policy renewing.
You have to first establish this.
You need to ask them to tell you where you signed up and dig out any copies of your documentation.

QUOTE]

Thanks, all terrible news but helpful. At the end of the first year they said 'Unless we hear from you otherwise we will renew your cover automatically'

Does that mean by not telling them to, I signed up to automatic renewal?

premtwinmum

lisyloo wrote: »

I would first ask them to show you where you agreed to auto-renew.
If they can and you did sign up, I'm afraid you agreed.
If they didn't then make a complaint and hopefully they will drop it.

Depends whether you orignially agred to the policy renewing.
You have to first establish this.
You need to ask them to tell you where you signed up and dig out any copies of your documentation.

Thanks, all terrible news but helpful. At the end of the first year they said 'Unless we hear from you otherwise we will renew your cover automatically'

Does that mean by not telling them to, I signed up to automatic renewal?