Saga/direct choice debit card payments

PATCH290

I cancelled a policy with Saga in June that had been in force since last year as I sold the car covered. The payments had been made by direct debit after the initial payment by debit card. I forward the certificate and covering letter to Saga. I the received a call saying I owed £102.40 cancellation fee which I disputed and asked for a breakdown to be sent to me. I then got a letter stating that if the sum was not paid in 7 days it would be passed to a debt collection agency, by this time no explanation of the sum had been received. On checking my bank account I was unable to reconcile the balance and saw a debit card payment for £102.40 had been taken on 7th Srptember by Direct Choice. I contacted my bank and was told as the payment had gone through I had to contacy Saga . I Emailed asking for a refund and the reply stated that the refund was refused and teh payment was taken from the original debit card in accordance with their terms and conditions. I again contacted my bank who confirmed tat a person who is given debit card details could revisit the account for more money, and that continuous debit card payments were being used more by insurance companies to reduce the amount of late/missed premium payments. I had allways thought that when you paid with a debit card over the phone or internet and provided the security code from the rear you were only authorising that one payment at that time, the fact that the data would be retained was never advised to me at any time. I will certainly be wary of paying over the phone or online by debit card in future even to a supposed 'reputable' company.

InsideInsurance

The terms and conditions of the sale will dictate what they can and can't do with the card number.

As your bank advised, the vast majority of insurer's terms include a clause that they will retain payment details for the purposes of both renewals and/ or any future payment they are unable to collect via the DD. This forms part of a continuous payment authority.

If you are not happy with this then either (a) chose companies that dont have such a clause or (b) inform them and your bank that you are withdrawing your continuous payment authority from them. However (b) may make you in breach of your policy terms and so cause the insurer to cancel your policy which creates a much bigger problem in the future when you find ALL your insurance premiums triple due to having to declare an insurer has voided a policy on you.

PS. Paragraphs make text much easier to read

PATCH290

My point is that at no time in my initial telephone contact was I advised that my card details were to be retained and may be used to take payments in the future.
I along with the majority of people beleived that when you give your card details for a transaction you are authorising only that one transaction.
I at no time gave a continuous payment authority to use my card , and all premiums were paid by direct debit.

InsideInsurance

I've never bought from an insurer that doesnt read a whole host of T&Cs as part of a long and boring script or give me the option to skip it with the advice they will be posted to me and I have cancellation rights.

I obviously dont have access to Saga's script and not that interested to go and buy a policy just to hear them but would be surprised if they neither have them in the call script nor in the documentation they send at purchase..... Direct Line was stung by the Information Commissioners Office in the 90s for not informing customers and since that all insurers have been good at doing it (CPA and auto renewal increases retention by circa 15-20 percentage points!)

What I can say without doubt is that customers are very bad at listing to said long scripts and/ or reading terms and conditions. As I've pointed out before, a client had a 2 page set of t&cs on their site which must be agreed to prior to proceeding to buy. Including load time the average time on that page was ~7 seconds.... shows how many are reading it!

rs65

I took out a policy with DL this month and their script is very clear - they ask you if you want to opt out of CPA.

No idea about saga though.

TheAllanCadenhead

Most insurance companies do tell you, if you're paying via direct debit, that the card used for the deposit will act as a guarantor against any default from the agreement. This includes cancellation charges. If the amount you have paid towards the policy does not cover the period of cover charged and the applicable cancellation charges, and you do not contact them to resolve the issue, they hold the right to debit the guarantor card.

However, if you speak to the company involved before they debit that card but after the policy is cancelled, you can "withdraw" the guarantor from the account. That way they are only able to chase you for the debt and will not take any monies from anywhere.

All companies are different. The best option for any unhappy customer to take is to contact the company involved and see what they can do. If the collegue cannot offer you a satisfactory solution ask to speak to a manger. If you're still unhappy after speaking to a manger then advised them that you will be taking your case to the ombudsman.

However, if it's in the T&Cs and you were told in the script, like @InsideInsurance has clarified, then you will be getting nowhere fast.

I hope this helps, and good luck