This automatic renewal scam is getting worse (rant)

2cb

Ah, the familiar mse refrain when anyone complains about an insurance company. "What do you expect if you buy on price". Of course I'm buying on price, this is supposed to be money saving isn't it? I didn't just go for the cheapest fly by night outfit, I went with Aviva, who I thought were a long-standing reputable firm.
So who are the companies that don't auto renew then? Tell me and I'll use them, because they don't make it easy to find out. In fact, that's more evidence that auto renew is nothing but a scam. If it was a benefit to the customer they would highlight it with the other benefits in the initial offer, but instead they always hide it in the T&Cs at the end. Why would they do that if it was for customers benefit?

Buzby

I've been with Aviva up until 2011 and there was no auto-renewal as it was through a third-party broker (and cheaper, too). On switching to Direct Line, buried in the T&Cs was that the policy would auto renew and my payment details would be retained for that purpose.

I then whacked of a letter informing them that I negotiate all insurances on an annual basis, and I neither require or want cover to exceed the 12 months contracted. Further, my payment method was dictated by their refusal to accept a cheque (MY preferred payment method). The payment taken was for the express purpose of the home insurance policy, and no permission or mandate has been granted for any further transactions in the future. If this is not acceptable to them, I require 28 days notice and will place my business with a competitor.

At a stroke, I normalise the situation, and have a paper trail to cover myself should they try I on later. Since it is 4 months on and they have not cancelled, I would be reasonable in assuming that my instruction had been carried out. I will let you know if it isn't.

Bottom line? You must ALWAYS read the T&C and any policy document provided, to simply accept the blurb and hope your expectations are met is rash and !!!!less in this day and age. If you pay by DD or plastic you have already ceded control of your finances to a third party, so you need to protect your interests, not simply assume they'll be trustworthy.

InsideInsurance

2cb wrote: »

Ah, the familiar mse refrain when anyone complains about an insurance company. "What do you expect if you buy on price". Of course I'm buying on price, this is supposed to be money saving isn't it?

Most would argue that true money saving is buying on value rather than price. To step away from insurance for a second, do you buy the item that costs £50 and lasts 1 year or the one that costs £75 and lasts 3 years?

What I dont understand is you are happy to buy a policy which states auto renewal is part of their processes, you are happy to then contact them to say you dont want to auto renewal but only if you can contact them immediately rather than in 11 months time? What difference does the wait make to you, your phone bill or anything else?

If you're concerned you'll forget to call them to advise you dont want to auto renew then the same concern exists that you forget to inform them that you want to renew on a manual renewal.

As to your point about marketing on auto renewal - every auto renewal letter that I've received does market on it, saying its easy etc as I dont need to do anything. They don't do point of sale marketing on it because its not a product differentiator as 95% of the market does it.

Do insurers like auto-renewals? Yes, it reduces operational costs - you send 1 renewal letter then sit and wait -v- sending a renewal letter and then weekly chasers until you hear plus outbound call centre agents to phone customers. .

Just because there are benefits to the insurer doesnt automatically mean it is a bad thing for the consumer. In a similar way to the fact I like online banking -v- having to go in branch to find out my balance or check if a refund has gone through etc even though that has also reduced operating costs for the bank.

2cb

Did you read my post? I don't go for the cheapest. I'm not happy with auto renewal, but they all do it.

InsideInsurance

2cb wrote: »

Of course I'm buying on price

Yes I did read your post.

Going for the cheapest by a name you've heard of really isnt buying on value as much as just price + fraud prevention

2cb

Right then, InsideInsurance, you're username suggests you know what you're talking about. I've asked this question before on MSE and never got an answer, so please tell me - which insurance comapanies are good, and / or how do I find out if a company is any good? I would happily pay more for a good company. I don't need any fancy extras, just basic insurance, but I want to be with a company that is reliable and looks after it's customers. How do I find one?

JimmyTheWig

2cb wrote: »

The policy is advertised with a big "new customer" discount, so there is no way that the renewal premium will be competitive.

I think this is the relevant bit.
Companies give big "new customer" discounts in the hope that they will retain the customer for years to come. The easiest way for them to retain a customer is to auto-renew them. They are hoping that, for one reason or another, people wil do nothing come renewal time and they will get the repeat business - at the regular rate rather than the discounted rate for the first year.

Is this right? Is it ethical? Is it fair? I'd argue no.
If they stopped doing it and charged fair premiums for new and existing customers then that would put the price up for those of us tarts who shop around each year.
[Personally I would rather fair pricing for everyone than to benefit from the pricing model at others' expense, but I don't feel that the way to achieve that is for individuals like me to boycott new customer discounts and so I do take advantage of them. In fact, I think the way to stop new customer discounts and move towards a fairer pricing model is if everyone took advantage of new customer discounts and cancelled after the first year.]

But whether it is fair or not, they do it. And yuo need to accept that you are getting a discount _because_ of the auto-renewal. If it wasn't for the auto-renewal then the initial premium would be higher.

dtaylor84 wrote: »

You think it's acceptable for a company to auto-renew an insurance policy after being informed by the policy holder that they do not want to auto-renew?

Their software design is their problem...

And that's why I think that dtaylor84 _and_ dunstonh are wrong here. I think that dunstonh is wrong because while the software limitations is a reason not to get cross with the person you are speaking to, it is not a valid reason to let the company off the hook.
But I think dtaylor84 is wrong because it is totally acceptable for the company to auto-renew after being told by the policy holder that they don't want to auto-renew if the customer has already had the discount in the first place of taking an auto-renewing policy.
Being able to cancel an auto-renewal before the renewal is like not having auto-renewal at all.
Would be like buying two things from a shop on bogof then taking the "first" back for a full refund and keeping the free "second" one.


OP, if this bothers you I suggest you contact the comparison websites and tell them that you think they should display prominently the fact that a policy isn't auto-renewed where it isn't - or even that they should have a filter where yuo only see policies that don't auto-renew.

kingstreet

Unintentional advert for BISL here.

BISL sets out its autorenewal process in its documentation, inviting policyholders to phone and cancel the autorenewal at any time and giving the telephone number for them to do so.

This appears a sensible way to go about the issue.

Once this is done, the policyholder then has the option of renewing manually, should they wish to do so after viewing the renewal documentation at the appropriate time.

In the OP's case, Aviva could be breaching TCF outcome 6;-

Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

by not accepting his request to terminate autorenewal when he wished to do so.

2cb

JimmyTheWig, that's very well put and I agree entirely with your first part. I am getting a cheap deal, and it's paid for by the people who fall for auto renewal. This is wrong, but it's not going to change anything if I auto renew too, so I'll continue to shop around for new customer discounts every year until someone puts a stop to the whole farce.
But, I still think the way they try and sneak it in is wrong. They pretend that it is for customers benefit, but it is actually for themselves. It's always hidden in the T&Cs, never in the key facts. If you search these forums you'll find many people who changed insurers and then got auto-renewed. Of course they should have read every last line in the T&Cs, but many people don't read that well and find ploughing through pages of text a struggle. It's not fair to rip these people off for the benefit of people like me who read everything.
I have come to expect auto renewal now. I haven't seen a single quote that didn't have it, so going elsewhere isn't an option. I assumed Aviva were going to do auto renewal, but I thought they would behave like the others and let me cancel it. If auto renewal is going to be the new standard practice, then they need to make it clear when you sign up that you are committing to an ongoing contract, not a years insurance. Because effectively that's what you are doing.

2cb

kingstreet wrote: »

BISL sets out its autorenewal process in its documentation, inviting policyholders to phone and cancel the autorenewal at any time and giving the telephone number for them to do so.

Everyone I've used, apart from Aviva, do that. So far this includes Bell, Churchill and Swinton.