GMAC: Home insurance - a con?

Clairbush

I know this is a mortgage chat room and before you all start jumping up and down it does have something to do with our mortage provider. So please bear with me.....

.... Admittedly we have had bad debts in the past and although we have sorted ourselves out now we are currently unable to get a mortgage through the main high street banks and building societies. We have been with GMAC for 4 years.

In the past our home and contents insurance was with Countrywide Insurance Services, as recommended by GMAC. However, this year we decided to shop around and found a much cheaper option with AA through https://www.confused.com.

However, we received a letter from GMAC saying that as we have changed provider they are going to charge us £40 for the privilege of doing so with an additional £40 if we do not provide photocopy proof of cover within 7 days. The letter is dated 4th April and we only received it on Saturday 7th April due to the Easter post. Although the extra cost still works out cheaper than what we were paying, I'd like to know from others whether they think this is reasonable or not.

On their letter they state the charge is for a lapse notification fee and in their conditions it states that if independent insurance is taken out they will charge a fee in respect of the company's administration costs in checking the policy and updating their records.

We made sure as one policy ran other, so the other one started so there was no lapse in cover!

Any advice gratefully received.

Thanks.

dunstonh

However, we received a letter from GMAC saying that as we have changed provider they are going to charge us £40 for the privilege of doing so with an additional £40 if we do not provide photocopy proof of cover within 7 days.

They could get away with £40 but a complaint to the FOS (assuming their own complaints dept dont give in first) would almost certainly see the FOS ruling the second £40 as being unfair under TCF rules.

kenshaz

Please report them because they are operating on the edge of the legislation and not in the spirit and intentions of the act.I fully understand your feelings .

Mr_helpful

It will probably cost you more than £40 in lost time etc complaining to the FOS

MortgageMamma

Yes but it will cost GMAC money to have the complaint investigated by the FOS, more money than they are currently charging the client, so even if the client does not get the second £40 dropped then at least GMAC have had to pay to get that £80. If more people did this lenders wouldnt take the urine.

kenshaz

Mr_helpful wrote: »

It will probably cost you more than £40 in lost time etc complaining to the FOS

Worth the effort and the satisfaction.This type of lender is already maximizing their profit by operating in this sector,not content with that they want to manipulate the vulnerable into uncompetitive products ,indefensible and I sure that all reasonable persons will see it in that light.

---lee---

Already replied to your first post here:

http://forums.moneysavingexpert.com/showthread.html?t=423769