Extortionate Car Insurance Demands

onomatopoeia99

When motor insurance is taken out for a year and cancelled before the end one does not receive a pro-rata refund on the the total policy price. I took out my first insurance policy when I was 18 in 1987 (on a Morris Marina!) and this was true then, as it is today. Some insurance gives no refund if cancelled before the end of the term.

You are liable for the full amount when you take out the policy. That you have signed a credit agreement to repay over a year does not remove your liability for the full amount. Similarly, if you write off the car on day two of the insurance you immediately become liable for the full amount, you can't say "the car is gone, I'm not paying any more!" What monthly car insurance payments are not is car insurance on a month by month basis, it's a contract for a year of insurance and you must pay for all of it (less any early cancellation refund specified by the contract).

So, to give a hypothetical example, cancelling after six months you might get a third of the premium refunded. If you had agreed an annual price of £1,000 for your insurance, then the refund would be £333. If you were paying this £1,000 over 12 months then you would only have paid £500 so far. Therefore before any cancellation fee, you would still have a debt of £167 on the insurance.

uknick

Not_Another_Username wrote: »

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?

You do seem to have been through the mill with all this and you have my sympathies.

May I ask, when you read through the insurance T&C sent with the original policy purchase, what did it say about early cancellation? If nothing was mentioned along the lines of what they are asking for then you have every right to complain.

nidO

Not_Another_Username wrote: »

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.

Their charges are clearly stated in their terms of business, which are if nowhere else very easy to find on every single page of their website at:

https://www.brokerwebservice.co.uk/PolicyDocuments/online/auto/toba/toba.pdf

Not_Another_Username wrote: »

What arrogant and judgmental people we have here!

No-one's being arrogant or judgemental, they're being realistic.
This forum is on a daily basis filled with "I've been scammed by XX" or "yy is ripping me off" or "look at this deception, they never told me!" and almost every single one of them boils down to:
"oh, that paperwork they sent me with *IMPORTANT INFORMATION* written on it? Don't be an idiot of course I didn't bother reading all that crap, if there was anything important they should have sent a man to my house to sit down and explain it to me in words no longer than half a syllable".

I don't know how you got your policy and I don't really care, you just need to decide what "none of these charges were made clear to me" means or what you were expecting (you haven't made this clear anywhere in any of your posts - sound familiar?).
If you were expecting every single condition of business to be explained verbatim to you rather than you reading what you were buying then you have massive overexpectations,

If you bought your insurance over the phone and have genuinely never been sent any documentation whatsoever (yes, that boring crap they sent that you binned counts) then you have a whole different complaint (but as an aside, how do you even know you were insured if you've never been sent an insurance cover note, certificate, renewal reminder etc?), but again until this point you haven't even suggested anywhere in your posts that you never received any documentation from them, simply that you "didn't agree to the charges" which is a synonym for "didn't read the terms and conditions", and you can't expect everyone on this forum to be mind readers, so have got the answers you've got.

BeenThroughItAll

Not_Another_Username wrote: »

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.


...snip...

I'm sorry, but you just come across as having a victim's mentality. If I hadn't received documentation, from someone providing me a service, pertaining TO that service and a contract I had established with the provider, I'd damn-well ring them up/write to them/tweet them/email them/post on their MyFaceSpaceBookGram page and chase them for it.


Just saying 'woe is me, they didn't give me any information' isn't good enough. You need to take some responsibility for your life and matters in it.


Every company you deal with rips you off? In that case, it sounds like you have major issues with personal admin, attitude, or mentality.

Not_Another_Username

OK. Looking at this from a different perspective, I understand everything which has been written - and I thank you for your time in replying. I do see the other side of the story and understand fully. It does make sense to me to pay the full premium if you have been unfortunate enough to have made a claim on day one, etc. I juts wish I had been made fully aware of this from day one. Perhaps I was, but it's three years ago and memories ain't what they used to be. I don't recall these details at least.

I am usually on the ball when it comes to money matters and contracts. I am usually the person you see at the front of the queue holding up everybody else while I read the small print.

Another company we use, First Utility, also have a £150 cancellation fee. I just don't think it's fair, personally, and it's an all too typical example of the 'money for nothing' games these corporations play these days.

Yes, we have been through the wars lately and it's made me very cautious. I could name other global powers who have exploited us in the last few months, but that would be veering off-topic. I might mention a few but, on the whole, I think we have been unluckier than most. I am pleased and quite proud that I challenged all these companies. So many 'innocent' people must be drawn into so many unnecessary payments and scams, unaware they are being ripped off, and I am talking about companies you ought to be able to trust.

My faith in these global giants is zero and, as I have said, not one of these companies has not tried it on recently. For you interest, the biggest and longest drawn-out case was with PayPal, who added another debit card to my account, without my knowledge or consent. It belonged to a family member who was also blissfully unaware of this. One of the PayPal operators I spoke to advised that, though rare, this did actually happen and had happened to her!

Ebay were a disgrace at the end of last year, imposing twice the amount of charges on a recent sale. I hardly use Ebay these days and would rather not, but it's a useful service, generally reliable, as PayPal has been, but you need to keep a close eye on them all.

O2 and EDF Energy go down in my book as being the scummiest of the pile of low-life money-making racketeers. O2 forged my signature, signing me into a contract I hadn't actually signed for. The local store got into trouble (supposedly) for this. EDF continue to demand payments for services we haven't used, including charges for the previous occupier of this address. They won't budge on this either, disputing the fact that I have made several complaints to them and to the Ombudsman's services. The case continues.

The sad truth of all these scams is that I am not alone. "Unlucky", yes. But these large companies will try it on with all of us at some point or other.

Thank you all again. I know this has become a rant and I will draw a line under this now, but I feel I should wait a little longer before deciding what to do with Auto Direct. I now understand that I probably do owe the money, but I will contest the fact that I was not informed about the charges and was not advised to check through the policy - something I do tend to do. Maybe it was my omission this time.

Best wishes.

John

arcon5

I've been with Auto Direct, they email documents and are available for download online. They we're actually pretty good.

Are you saying you didn't receive the insurance certificate? All documents are sent together.

It's more than likely you didn't bother reading all this info as well as the terms you agreed to during the signup process.

Ask for a breakdown of these charges?

InsideInsurance

Not_Another_Username wrote: »

Another company we use, First Utility, also have a £150 cancellation fee. I just don't think it's fair, personally, and it's an all too typical example of the 'money for nothing' games these corporations play these days.

The fees charged by insurers have been tested in the past and have been deemed proportional on an averaging basis. I had the joy of having to provide the numbers for an insurer a good few years ago.

Insurance is an expensive business to be in and acquisition costs are very high, just look at Quidco and you will see commissions of up to £100 plus then the money paid to Quidco themselves plus their TV advertising etc.

The average customer cancels relatively early in the policy and as cancellation fees work on an average basis that means the lions share of acquisition costs get put into the fee.

Of course there is the counter argument that actually this should just be the cost of doing business and rather than charging those that cancel £75 you should instead charge everyone £10 if they cancel or not (or whatever the number is).

Firstly, this isnt considered fair by the majority who dont cancel and that charging those that cancel it is fairer. Secondly with people being willing to switch insurers to save less than £1 the idea of increasing your prices by £10 across the board so that cancellers dont pay a fee is not going to get your more sales

Johno100

onomatopoeia99 wrote: »

When motor insurance is taken out for a year and cancelled before the end one does not receive a pro-rata refund on the the total policy price. I took out my first insurance policy when I was 18 in 1987 (on a Morris Marina!) and this was true then, as it is today. Some insurance gives no refund if cancelled before the end of the term.

So, to give a hypothetical example, cancelling after six months you might get a third of the premium refunded. If you had agreed an annual price of £1,000 for your insurance, then the refund would be £333. If you were paying this £1,000 over 12 months then you would only have paid £500 so far. Therefore before any cancellation fee, you would still have a debt of £167 on the insurance.

BIB I think you will find things have moved on in the last 25 odd years. Pro rata refunds for the period of cover is now the norm, plus of course an admin fee and interest charges if paying by installments.

Short term cancellation rates such as those you describe can now be deemed an unfair term under the Unfair Terms in Consumer Contract Regulations 1999. This is the Financial Ombudsman Services take on cancellation charges, with an example they adjudicated on.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

dacouch

Did you make a claim on the policy?

Hintza

Not_Another_Username wrote: »

For you interest, the biggest and longest drawn-out case was with PayPal, who added another debit card to my account, without my knowledge or consent. It belonged to a family member who was also blissfully unaware of this.

So PayPal just happened to add a debit card to your account with no input from you or your relative?

Hmmm.