Complaint to Ombudsman re. Autorenewal = A Sharp Practice

mikey72

!!!!!! wrote: »

As I said it is on the website when you pay and also in the policy document (page 20) & key facts (page 1)

I think you're missing the point entirely here.

As a third party, I don't have a policy, the key facts don't apply to me, they apply to the policyholder. If I pay for someone else, I'm not the policy holder. The insurers have no contract at all with me.
I suspect when you have said you see it when you have paid, you have actually set up a policy in someone elses name, not merely entered the details on the payment page, or passed your card across to someone else to enter, or agreed to pay over the phone, then merely gone through the payment process.


edit - checked the payment page

the first question is whose credit card is this.

click family, and it asks

"We will use this card for future payments......To do this, we need the consent of the cardholder. Click OK if the cardholder gives their consent"

If doesn't even ask the cardholder to click ok!

And if you click "no"

"Please note that payment from the Third Party card will only be accepted for the initial premium. Any future premium charges will require an alternative payment method."

hugoshavez

mikey72 wrote: »

I think you're missing the point entirely here.

As a third party, I don't have a policy, the key facts don't apply to me, they apply to the policyholder. If I pay for someone else, I'm not the policy holder. The insurers have no contract at all with me.
I suspect when you have said you see it when you have paid, you have actually set up a policy in someone elses name, not merely entered the details on the payment page, or passed your card across to someone else to enter, or agreed to pay over the phone, then merely gone through the payment process.

I think you just don't like auto-renew. There's an assumption on the part of the cardholder that it will be a single payment, but that's all.

If your kid says: "Dad, I'm entering into a contract and I need your credit card to pay" do you just say "sure" no questions asked?

Or do you ask your kid if they've read the small print? (Never mind Page one of Key Facts)

Maybe (as they're not independent enough to provide consideration themselves) do you take responsibility and leaf through it yourself?

System

mikey72 wrote: »

I think you're missing the point entirely here.
.

No you are missing the point. When YOU enter your credit card details online it tells you at that point that it will use those details for renewals. If you wish to ignore that then that is your choice. You have been told they will be used and you can abort if you don't agree.

edit - checked the payment page

the first question is whose credit card is this.

click family, and it asks

"We will use this card for future payments......To do this, we need the consent of the cardholder. Click OK if the cardholder gives their consent"

If doesn't even ask the cardholder to click ok!

To me that sounds more like a problem that you have with the other person and not the insurance companies

mikey72

hugoshavez wrote: »

I think you just don't like auto-renew. There's an assumption on the part of the cardholder that it will be a single payment, but that's all.

If your kid says: "Dad, I'm entering into a contract and I need your credit card to pay" do you just say "sure" no questions asked?

Or do you ask your kid if they've read the small print? (Never mind Page one of Key Facts)

Maybe (as they're not independent enough to provide consideration themselves) do you take responsibility and leaf through it yourself?

edited the above.

I think the insurer has answered you.
It's not an assumption, it's the contract. And no, I give them the card. I know them, and I know what's actually enforcable.

mikey72

!!!!!! wrote: »

No you are missing the point. When YOU enter your credit card details online it tells you at that point that it will use those details for renewals. If you wish to ignore that then that is your choice. You have been told they will be used and you can abort if you don't agree.

Maybe you need to read the words it actually says.

But, if you're happy, fair enough, I don't need to convince you.

I quit.

dunstonh

Well done OP. I might also make a complaint to FOS for good measure (complaint about sharp practice in the use of CPAs). Hope the FOS complaint fee costs the insurer 50% more than my annual premium. They might learn of our disquiet if it costs them money when they least expected it.

Would almost certainly be classed as a frivolous complaint and the charge waived.

In such circumstances an auto-renewal is particularly dangerous.

.

Less than going uninsured.

Some idiots even started suggesting it was fraudulent to obtain different quotes using different details.

They didnt say it was fraudulent. They said that the insurers can record such details and may consider you a higher risk for fraud.

But finally, if you do see any evidence of this Continuous Payment Authority auto-renewal nonsense, do report it to FOS as sharp practice.

The FOS has no authority to make any ruling on that. The FSA decides and the FSA seems to prefer auto renewal.

Renewal is your opportunity to check that all the details in the schedule are correct.

Absolutely. That means opening the envelope and reading the letter and it's contents. Strangely enough. If you do that, then you will never got "caught out" by it.

Amazing how reading instructions can avoid problems.

TSx

I have no problems with auto-renewal in theory however as often seen (not always, but usually) on here, the renewal premium seems to out of line with the market and even their own pricing.

A few ideas

1) Make it opt-in (this seems the simplest solution, those who want it can have it, those who don't won't), or allow opt-out at any point during the contract.
2) Enforce that any renewal premium matches the new customer premium for the sales channel the customer came through. If any introductory discounts are applied in year one, these need to be made clear.
3) Make the process of cancelling if you have obtained new insurance simpler - as long as proof can be shown that you purchased new insurance, offer a refund of the renewal immediately.

I don't think most people's issues are with auto-renewal per-se, it is with the fact that the insurance companies seem to use auto-renewal as a tool to keep existing customers at inflated premiums, knowing if auto-renewal didn't exist, there's a very good chance they would go elsewhere.

Indeed, I spoke to someone a few days ago (I don't generally deal with underwriting/sales) who said she found home insurance so much easier these days because she didn't need to do anything and she knew she would be covered. It does have benefits and some consumers do like it - my concern is about the way some companies exploit that process.

mikey72

TSx wrote: »

I have no problems with auto-renewal in theory however as often seen (not always, but usually) on here, the renewal premium seems to out of line with the market and even their own pricing.

A few ideas

1) Make it opt-in (this seems the simplest solution, those who want it can have it, those who don't won't), or allow opt-out at any point during the contract.
2) Enforce that any renewal premium matches the new customer premium for the sales channel the customer came through. If any introductory discounts are applied in year one, these need to be made clear.
3) Make the process of cancelling if you have obtained new insurance simpler - as long as proof can be shown that you purchased new insurance, offer a refund of the renewal immediately.

I don't think most people's issues are with auto-renewal per-se, it is with the fact that the insurance companies seem to use auto-renewal as a tool to keep existing customers at inflated premiums, knowing if auto-renewal didn't exist, there's a very good chance they would go elsewhere.

Indeed, I spoke to someone a few days ago (I don't generally deal with underwriting/sales) who said she found home insurance so much easier these days because she didn't need to do anything and she knew she would be covered. It does have benefits and some consumers do like it - my concern is about the way some companies exploit that process.

You're right with all those points.

Not only is it impossible to opt out, many insurers somehow many to lose the instructions not to renew, or the renewal notice gets lost on the way to the customer.

Perhaps if the insurer wasn't so keen to drop their renewal price when challenged, the renewal price may be seen as reasonable. The fact they'll usually instantly pricematch tends to suggest it's an attempt to rake in excess profit on customer inertia.

kingstreet

A couple of years ago, I was insured with BISL. The new business email arrived at the point I purchased the cover, backed up by a written version a few days later. On page 4, with the premium calculations, is a section headed "Automatic Renewal" which explains how it works and provides a telephone number for you to opt out at any time.

Around a month before renewal, the pack arrived and the first page reads;-

If your details are correct, sit back and relax. You don't need to do anything as your policy will automatically renew on 16 June 2011.

If you need to make any changes, or don't want us to renew your policy, call us on 0800 294 7579...

I don't know how other firms might do this, but an email, a written copy and a renewal pack all provided the opportunity to opt out of the automatic renewal process. I was particularly pleased with the 0800 number given at renewal.

I called them to cancel the renewal.

My proof of no claims arrived by post the day after the contract ended. I was quite impressed with the overall service. It worked for me.

mikey72

Why didn't you want to renew with them?