Non-authorised recurring payment on car insurance

Cyberman60

My RAC car insurance took a payment from my bank account by debit card last month. I informed my bank over two weeks prior to that of the amount and the payee as I received a renewal quote from them telling me that they would take the next payment automatically.

I phoned RAC on the day of receiving the quote to advise them that I did not want to renew but could not get through on the phone number they gave, only getting a constant recorded message saying 'please hold the line is busy etc'. I was due to leave the UK the following day for a month so eventually had to give up on the phone call, thus I decided to inform my bank to stop this payment under all circumstances by their online secured banking email.

Two weeks later the bank allowed the payment through on my debit card !!! Then a few days later they refunded the amount so after retrurning a few weeks later to the UK I assumed that the stop had worked and decided to take out car insurance through another company.

Just a few days ago I received a call from my bank saying that they cannot actually stop payment as I had not cancelled it with the insurer. I explained again that I had tried but could not get through due to the RAC line being busy but surely the bank has passed an unauthorised transaction. I have since again tried to cancel the RAC insurance over the phone but still cannot get through even using two different numbers (one supplied by my bank), and spent half an hour doing this on Friday to no avail.

This now leaves me with two car insurances but I believe the bank are in the wrong and should not have passed the transaction on my Debit card after I cancelled via them two weeks prior to that.

I'd appreciate any advice. Thanks.

PeacefulWaters

You're both in the wrong.

You are able to stop a CPA with your bank. The reality is they have to wait for the payment to come through before reimbursing it though. So it's a pain in the butt doing it this way. In my opinion they should reimburse you again.

http://www.moneysavingexpert.com/banking/recurring-payments

In June 2013, the Financial Conduct Authority reiterated banks MUST cancel a continuous payment authority when asked. It also added that if further payments are taken in error after a customer asks for a cancellation, the bank must refund them.

But you never cancelled with RAC. So as far as they're concerned you want to be insured with them.

Cancelling payment authorities does NOT cancel the insurance contract. Your bank cannot cancel your policy. I'd expect RAC to charge you a steep cancellation fee now and, contractually, you're liable.

GingerBob_3

Yet another example of the downside of inertia selling, or as the insurance industry call it, auto-renewal.

Cyberman60

PeacefulWaters wrote: »

You're both in the wrong.

You are able to stop a CPA with your bank. The reality is they have to wait for the payment to come through before reimbursing it though. So it's a pain in the butt doing it this way. In my opinion they should reimburse you again.

http://www.moneysavingexpert.com/banking/recurring-payments



But you never cancelled with RAC. So as far as they're concerned you want to be insured with them.

Cancelling payment authorities does NOT cancel the insurance contract. Your bank cannot cancel your policy. I'd expect RAC to charge you a steep cancellation fee now and, contractually, you're liable.

If the bank stop payment then the insurance company are aware of stopping the payment so the insurance would be invalidated. So, I don't agree with your logic there. Also, I never agreed to a recurring debit to my debit card as nothing is in writing so the insurance company is assuming an agreement where there is none. The bank is in the wrong and the insurance company also IMO.

According to this website I am within my rights to cancel with the bank:

http://www.fca.org.uk/news/continuous-payment-authorities-your-right-to-cancel

Cyberman60

GingerBob wrote: »

Yet another example of the downside of inertia selling, or as the insurance industry call it, auto-renewal.

It's not due to my inertia though, but due to the telephonic inertia of RAC and inertia of my bank in failing to follow my instructions to the letter.

Cyberman60

.. and this is the key bit from the fca website :

How to cancel a continuous payment authority

In most cases, you should be able to cancel by contacting the company taking the payment and asking it to stop. However, you do have the right to cancel directly with your card issuer. Once you have done this, it must stop payments immediately – it cannot insist that you agree this with the company taking the payment first.
REMEMBER: IT IS YOUR RIGHT TO CANCEL CONTINUOUS PAYMENT AUTHORITIES DIRECTLY WITH YOUR CARD ISSUER
However, it is recommended you inform both the company taking the payment and your card issuer when cancelling a continuous payment authority.



So methinks I'm in a strong position here as the card issuer is my bank !!!!!

PeacefulWaters

Cyberman60 wrote: »

If the bank stop payment then the insurance company are aware of stopping the payment so the insurance would be invalidated. So, I don't agree with your logic there.

The renewal will still have taken place. So invalidating the insurance will still cost you.

Also, I never agreed to a recurring debit to my debit card as nothing is in writing so the insurance company is assuming an agreement where there is none.

Yes you did. You just don't remember. If I'm wrong you have a stunningly good complaint against the insurer. So pursue it.

The bank is in the wrong and the insurance company also IMO.

We are already agreed that the bank is in the wrong. I'd be pretty certain that the insurer has done nothing wrong at all. Your failure to confirm the cancellation with them wasn't very smart.

According to this website I am within my rights to cancel with the bank:

http://www.fca.org.uk/news/continuous-payment-authorities-your-right-to-cancel

I have already provided a similar MSE link that agrees with you on this.

But I repeat, cancelling payment authority with your inept bank doesn't nullify the insurance contract.

Cyberman60

PeacefulWaters wrote: »

The renewal will still have taken place. So invalidating the insurance will still cost you.

Yes you did. You just don't remember. If I'm wrong you have a stunningly good complaint against the insurer. So pursue it.

We are already agreed that the bank is in the wrong. I'd be pretty certain that the insurer has done nothing wrong at all. Your failure to confirm the cancellation with them wasn't very smart.

I have already provided a similar MSE link that agrees with you on this.

But I repeat, cancelling payment authority with your inept bank doesn't nullify the insurance contract.

There was nothing in writing as it was an online insurance. Yes, they could argue that there was a clause I should have seen but I know that I never ticked a box to directly authorise recurring debit as I never would agree to that.

Failure to pay does nullify insurance. Insurance companies cannot have it both ways.

Also, as I've already stated, I've spent 40 minutes overall trying to cancel over the phone so my failure to confirm is also their fault in having a dodgy telephone answering system.

PeacefulWaters

As you obviously know best, I'll leave it with you.

Good luck.

rach_k

Couldn't you have put a quick letter in the post to cancel the insurance?

Cyberman60

Thanks PW. I've decide to raise an email complaint with RAC rather than waste time trying to phone them again and hopefully they will get the message that I do not want their insurance if they have not got it from my bank already.