Extortionate Car Insurance Demands

Not_Another_Username

My wife now has a Motability car and all insurance and breakdown cover is included. Our previous car was in a bad way and ready for the scrap heap.

Our previous car insurance company, Auto Direct, have hit us with a £144 bill and threats of 'debt recovery' to cover cancellation/payment for the remainder of the year (six months). I have never known anything like this before as any previous early termination of car insurance just 'ended' and that was that. No penalty fees. Surely this is akin to obtaining money by deception? They already demanded £25 a year ago for a change of address. We have been loyal to them for the last three years.

Surely this is wrong. We didn't sign a contract to accept these extortionate fees. Where do we stand?

Thanks if anybody can help.

John

Marktheshark

How were you paying ?
One go or on Credit ?

InsideInsurance

You entered a 12 month contract with them, the insurer and potentially a credit provider. It is standard practice for there to be fees for exiting the contract early, the fact there are 2-3 parties involved in your contract means that the fee is likely to be more than if there was just one with a direct insurer.

In addition to cancellation fees optional extras often are charged in full, and time on cover may be recalculated at a higher short term rate but this isnt that common.

Ultimately ask them for a breakdown of the fee and then check your documents to ensure they are correctly applying the fees.

As to the "I didnt sign anything", I am sure you wouldnt want them to use the same excuse for not paying a claim because you didnt sign anything either?

Not_Another_Username

Payments were by Direct Debit.

I have never heard of anything like this before. I remember I used to be able to cancel a policy and move to a cheaper one without any fees. I don't see any justification in this at all and it really does seem not far removed from obtaining money by deception. We were not informed about these fees at the start.

As for the contract argument, I did not know about / agree to any of these additional and extortionate payments.

InsideInsurance

Not_Another_Username wrote: »

Payments were by Direct Debit.

I have never heard of anything like this before. I remember I used to be able to cancel a policy and move to a cheaper one without any fees. I don't see any justification in this at all and it really does seem not far removed from obtaining money by deception. We were not informed about these fees at the start.

As for the contract argument, I did not know about / agree to any of these additional and extortionate payments.

Paying by monthly DD = credit

With many smaller brokers/ intermediaries they use third party credit houses to do this and they too add an early settlement fee to the terms.

Not sure when you last had to cancel a policy, was almost a decade ago when I introduced cancellation fees for one of the largest direct insurers and at the time they were almost the last ones not to charge fees.

If you buy online then their website should tell you about the fees - its in all those bullets that you have to click "I agree" to but dont bother reading. Similarly it should be mentioned if you buy it over the phone and your also instructed to read the documents when they arrive

The regulators have previously reviewed cancellation fees and decided it is fairer to charge those that cancel early the fee for doing so than to charge everyone more to cover those unearned acquisition costs etc.

BeenThroughItAll

Not_Another_Username wrote: »

As for the contract argument, I did not know about / agree to any of these additional and extortionate payments.

Then you didn't read the insurance proposal and/or terms and conditions thoroughly.


I have just taken out insurance this week and my new policy documents give plenty of detail of the various charges which will apply should I change/cancel the policy.


Sorry, entirely your fault for not reading the documents.

Spicy_McHaggis

Not_Another_Username wrote: »

Payments were by Direct Debit.

I have never heard of anything like this before. I remember I used to be able to cancel a policy and move to a cheaper one without any fees. I don't see any justification in this at all and it really does seem not far removed from obtaining money by deception. We were not informed about these fees at the start.

As for the contract argument, I did not know about / agree to any of these additional and extortionate payments.

What you agreed to in simple terms was 12 months insurance and you were provided with that.

Along side the insurance was a credit agreement in which to pay for the insurance. You have decided to end it early so I suggest you read what you signed up to.

Marktheshark

The bill will be for the interest on the loan they gave you to pay the insurance with.
Coupled with the cancellation fee.
When you opt to pay on the chucky, someone has to lend the money and they want paying.

forgotmyname

Not_Another_Username wrote: »

Payments were by Direct Debit.

I have never heard of anything like this before. I remember I used to be able to cancel a policy and move to a cheaper one without any fees. I don't see any justification in this at all and it really does seem not far removed from obtaining money by deception. We were not informed about these fees at the start.

As for the contract argument, I did not know about / agree to any of these additional and extortionate payments.

It will be clearly shown in your paperwork. I presume you didnt bother to read them. Bur assure you they will be there.

You took out a years insurance. Even though you pay monthly.

colino

The insurance company took on the risk of you ploughing into a bus stop filled with pregnant nuns the first minute of your twelve months cover. They want the remainder of the money you owe them for that 12 months policy or a cancellation fee to compensate them.

Not_Another_Username

Again, I will obviously have to repeat. None of these charges were made clear to me. I did not receive any documentation for almost a year from Auto Direct, despite numerous requests.

What arrogant and judgmental people we have here! You certainly will not like the next thing I have to say.

Having been ripped off by various utility companies and other large couldn't-care-less companies over the last 18 months (Yes, We've been through it all too!) we found ourselves in an impossible to manage debt situation, for which we received some good advice and help from local community help group. We will just have to let them pursue us until this finally goes to yet another debt collector. They too will receive the proverbial 'pound a month' and will have to like it or lump it.

For your information: Over the last three months alone, large corporations have: Illegally signed us into contracts we hadn't signed for or agreed to in writing (O2 were the worst); Had money demanded for services we had never subscribed to (EDF and N-Power) - Ombudsmans services had to sort out the problems, some of which are still ongoing; Threats of demands for hundreds of £s payments for bills less than a week overdue, despite knowing we were actually ahead with payments (Anglian Water and First Utility). Yes, we really have been through it ALL. Not one single company we deal with hasn't tried to extort money from us in one form or another and I will not allow companies like Auto Direct to do the same.

So what if it was ten years ago before charges were implemented for cancellations? I was not made aware of these and was not informed. This should be illegal as nobody should be paying for something they are not using.

What world are you living in?