Bad Debt Protection Cover - business protection?

Jillyp

As a business involved in an invoice factoring agreement, we have paid for Bad Debt Protection Cover (BDP) for over 7 years as a % of our business turnover per annum to the bank. Sold to us a protection against a client/customer going into administration/liquidation, premiums would be paid to secure the bad debt cover.
A failed claim and endless enquiries that followed we discovered the bank has the capacity to withdraw cover based on any element of risk of Bad Debt being applied to the trader/customer in advanced technology warning systems. I have also discovered: -
1. There is no policy document associated with BDP,
2. No terms and conditions were or have ever been provided
3. There is No Record of the costs as to how much has been charged for the cover from our business account to the bank (the bank are unable to provide this information as their system does not calculate the costs applied as it is taken as part of an increased premium service charge??)
4. No way of a making a claim if your customer goes bump in the event the bank were previously informed of any risk being applied (insider trading??)
5. No recourse against an unsuccessful claim in the event the cover had been withdrawn where any risk was applied.

Why pay for cover and protection when the very essence is that it can be diminished at the push of a button by the service provider?

Not fair wouldn't you say.....?