Premium Credit - First Transaction more than entire quote

guarantor

My son has taken out Endsleigh Student Insurance and was unable to pay the full premium so opted for monthly payments. He has been sent a set of documents from Premium Credit (to our address not his!) that appear to be giving him £1,500 of credit with a "First Transaction" that is £20 more than the annual quote from Endsleigh even though the documents say there is 0% transaction fee.

The letter that came with these documents claims that this is a reminder letter as my son hadn't responded to an earlier request to sign the credit agreement. No other letter has been received but their paperwork states that "If we have to write to remind you to return your signed credit agreement we will charge you £10." Good way to make a bit of extra money by claiming to have sent an earlier letter then sending a "reminder" at a cost of £10!

Additionally, nowhere in these documents does it show what his monthly payments are or what date they will be withdrawn.

As a parent, I am horrified that in order to pay monthly for an insurance policy, the annual premium for which is less than £200, my son is being offered credit of up to £1,500! This is total overkill for such a small amount!

rs65

guarantor wrote: »

As a parent, I am horrified that in order to pay monthly for an insurance policy, the annual premium for which is less than £200, my son is being offered credit of up to £1,500! This is total overkill for such a small amount!

Why horrified?

I believe he can only use the credit to fund insurance premiums.

dunstonh

As a parent, I am horrified that in order to pay monthly for an insurance policy, the annual premium for which is less than £200, my son is being offered credit of up to £1,500! This is total overkill for such a small amount!

He isnt being offered £1500 credit.

He is taking his car insurance on credit but there is a floor limit of £1500 where they do not check his credit file. If it was above that, they would do a credit check. So, it is an "up to" £1500 agreement.

Nothing to be horrified of at all. Indeed, from what you say, he was only £20 within that floor limit. So, not sure why you could consider that something to be horrified about.

Good way to make a bit of extra money by claiming to have sent an earlier letter then sending a "reminder" at a cost of £10!

Premium credit cannot enforce the agreement in court without signature. So, they need it and often the only way to get people to return things is to charge if they fail to do so.