cancellation fee in cooling off period

squashynose

My partner took out insurance on a scooter on 30th May (Weds) to take it for MOT, it passed and he sold it on 1st June (Fri). He purchased a new motorbike on the same day, and called the insurance company on Saturday to try to swap the insurance over on to that. The first number he tried was the number he set up the policy on, and he was told they only had a quote for him, no insurance. He wasn't impressed. So then he googled for the company, and found a direct number, and called that. The phone was answered by a security guard, who said the company had gone bust ages ago but were still taking money, and he'd inundated with calls from people who'd had their vehicles taken off them etc. :mad: Again, not impressed. The guard said there would be no one back in the office until Wednesday, and to call back then.
Yesterday, he called another company (google told us were part of the same company), and this time actually got through to a proper person. Turns out he was insured, so all that stress was over nothing. BUT they cannot insure the motorbike
They've now said that there is a £20 cancellation fee, even though it's within the cooling off period, and say that it states that in their terms and conditions in the paperwork, paperwork we only received yesterday, 3 days after we wanted to cancel it. The person on the phone says he should have been made aware of it when he took out the policy, but he wasn't. The whole policy for the year is only £97, and I already paid a £19 deposit, and now they want another £20 to cancel it. He was insured for 7 days, and if they'd been open on Saturday, it would have only been 3 or 4 days. In fact, the scooter was sold on the Friday, 2 days into the policy, so he has no insurable interest in it after that point.
Can anyone give me any advice please? Can they charge £20 to cancel it? They're saying that the refund from the deposit, plus the cancellation fee means we still owe them a couple of quid, but I am not happy with paying £20+ for 3 or 4 days insurance!!

dunstonh

Can they charge £20 to cancel it?

Yes. Cancellation rights do not prevent a charge from being levied.

The charge needs to be disclosed either online (if bought online) or mentioned on the phone if bought over the phone.

andyf3050

I thought that no cancellation fee was charged within the 14 day cooling off period...? Also, they have taken a deposit from you which they will say covers the period that the vehicle was insured. You could work it out and then put it to them that the amount you have paid in deposit is greater than the cost of the number of days insured. Write to them and challenge this fee...? Sounds like they are pulling a fast one...!

InsideInsurance

No, the FOS accept up to £50 being charged.

The cancellation period simply means you have a RIGHT to cancel, not that it is fee free. You will find that after cancellation you have no automatic right and that some add ons (eg Legal Expenses) often are effectively voided by the absence of the parent policy but payable in full

Quentin

InsideInsurance wrote: »

No, the FOS accept up to £50 being charged.....

You keep posting this, as if we can get out of paying any more, but they said that years ago.

Nowadays £50 and more is normal to see being charged as a cancellation fee, (eg Axa/Swift/Hastings/Shiela/esure all charge more - and budget's cancel fee is £75)

InsideInsurance

ok, will add a + sign from now on

dunstonh

The FOS have only published one example and that was over 5 years ago. It also indicated that the £50 was not a minimum or maximum but was justified in that particular case. So, inflation could well see a higher figure easily acceptable now. However, it is still a good guide and a good reference point as if you know the FOS have accepted £50 as being justifiable then you pretty much know the outcome of any complaint if £50 or less is charged.

I thought that no cancellation fee was charged within the 14 day cooling off period...?

That is a myth. FSA rules do allow cancellation charges. Insurance is also exempt from distance selling regs (most of which has been integrated into FSA rules)

mikey72

Quentin wrote: »

You keep posting this, as if we can get out of paying any more, but they said that years ago.

Nowadays £50 and more is normal to see being charged as a cancellation fee, (eg Axa/Swift/Hastings/Shiela/esure all charge more - and budget's cancel fee is £75)

And well worth a complaint to the FOS in they charge £75.

dunstonh

mikey72 wrote: »

And well worth a complaint to the FOS in they charge £75.

See I dont understand this.

If you buy a product that says at the start that they will charge you £75 if you cancel. Then what grounds for complaint do you have if they then charge you £75 for cancelling?

You agreed to the terms when you took it out. The figure hasnt changed. What is there to complain about?

InsideInsurance

Presumably the same unfair contract clause that banks got stung over about overdraft fees when the OFT investigated it

JuicyJesus

InsideInsurance wrote: »

Presumably the same unfair contract clause that banks got stung over about overdraft fees when the OFT investigated it

...and the banks won.