Hastings have cancelled my policy..help

raskazz

The FOS have already made their position on cancellation rates clear:

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

Asymmetry in rights alone is not sufficient for a term to be deemed 'unfair' under the UTCCR - the term has to significantly imbalance the rights of parties to the detriment of the consumer.

Where a firm's rates for short-period cancellation by the conumer are clearly unreasonable - say, no refund if the consumer cancels after four or five months - then the firm's right to cancel with a pro-rata refund may be regarded as unfair.

MarkyMarkD

I don't agree that the FOS position makes that clear at all.

Whilst they clearly are opposed to unreasonable short-term rates, and they consider that it's reasonable to charge an administration fee for early cancellation by the customer, I cannot see anything which states that the FOS accept that asymmetry is acceptable or fair.

In any case, FOS don't define or clarify the law.

Arguably, irrespective of the actual amount of an early cancellation charge, the fact that it's fully chargeable if YOU cancel, and not chargeable at all if THEY cancel, is a significant imbalance of rights.

raskazz

MarkyMarkD wrote: »

I don't agree that the FOS position makes that clear at all.

Whilst they clearly are opposed to unreasonable short-term rates, and they consider that it's reasonable to charge an administration fee for early cancellation by the customer, I cannot see anything which states that the FOS accept that asymmetry is acceptable or fair.

In any case, FOS don't define or clarify the law.

Arguably, irrespective of the actual amount of an early cancellation charge, the fact that it's fully chargeable if YOU cancel, and not chargeable at all if THEY cancel, is a significant imbalance of rights.

Well, perhaps you should re-read it. I think it's pretty black and white.

Insurers' cancellation rights generally are an imbalance of rights - but a significant imbalance? No, afraid not.

As an aside, the issue of bank charges has been a spectacular success for consumers (and I reclaimed a 4 figure sum), however since it gained widespread coverage I have noticed a tendency for the UTCCR to be trotted out at every available opportunity by people who have very little legal knowledge.

Oh, and the FSA are a 'qualifying body' under the UTCCR - i.e. they do "define and clarify" the law; and the FOS adjudicates according to FSA regulation.

MarkyMarkD

Perhaps you could quote the (imaginary) part of the FOS's newsletter where they state that an imbalance in cancellation rights is entirely acceptable to them.

Whether an imbalance is significant is surely a matter of interpretation in each individual case. I would argue that a 10-15% penalty for early cancellation is significant in any contract. And that might be 10-15% of the total contract amount, but 50% or more of any potential refund.

I share your view that people trot out UTCCR in many places where it's irrelevant - such as the bank charges issue for example. But this isn't one of those cases.

The FOS's role is

to help settle individual disputes between businesses providing financial services and their customers

It's not to define and clarify the law. Just because FOS adjudicates according to FSA regulation doesn't mean the they define and clarify the law - the logic doesn't work in both directions.

raskazz

MarkyMarkD wrote: »

Perhaps you could quote the (imaginary) part of the FOS's newsletter where they state that an imbalance in cancellation rights is entirely acceptable to them.

Whether an imbalance is significant is surely a matter of interpretation in each individual case. I would argue that a 10-15% penalty for early cancellation is significant in any contract. And that might be 10-15% of the total contract amount, but 50% or more of any potential refund.

Er, read the first case study.

"So we told the firm it should make a pro rata refund, after deducting a reasonable administration fee."

If it was deemed unfair merely to have any imbalance at all to the detriment of the consumer then the FOS would have found in favour of the complainant based solely upon that, and ordered a pro-rata refund with no deduction. However, they only found in favour of the complainant because the cancellation rates for cancellation by the consumer were particularly onerous - i.e. no refund for cancellation after 4 months on cover.

Most insurer's cancellation rates are far more reasonable than those in the case study. In addition, the cancellation conditions are not entirely skewed in favour of the insurer anyway - normally the insured can cancel without giving notice; the insurer always has to give 7 or 14 days notice.

As for your percentages, it's interesting to hear your opinion but they're not actually grounded in any principle of law are they?

All of this is enteratining but it's deviating somewhat from the topic of the thread. I guess I only responded to the UTCCR point originally to save people wasting their time including highly dubious legal opinion in the substance of their complaint.

And I never stated that the FOS did define and clarify the law by the way.

MarkyMarkD

raskazz wrote: »

Er, read the first case study.

"So we told the firm it should make a pro rata refund, after deducting a reasonable administration fee."

If it was deemed unfair merely to have any imbalance at all to the detriment of the consumer then the FOS would have found in favour of the complainant based solely upon that, and ordered a pro-rata refund with no deduction. However, they only found in favour of the complainant because the cancellation rates for cancellation by the consumer were particularly onerous - i.e. no refund for cancellation after 4 months on cover.

Most insurer's cancellation rates are far more reasonable than those in the case study. In addition, the cancellation conditions are not entirely skewed in favour of the insurer anyway - normally the insured can cancel without giving notice; the insurer always has to give 7 or 14 days notice.

The FOS aren't commenting on a case where the insurer has cancelled and failed to pay any compensation. They are commenting on cases where the insured has cancelled. I'm not disputing, at all, that insurers should be able to charge cancellation fees. But they ought to pay the same compensation to customers if they cancel policies (other than in situations where the cancellation is due to the insurer identifying deception or similar).

As for your percentages, it's interesting to hear your opinion but they're not actually grounded in any principle of law are they?

But nor is your view that they don't represent a significant imbalance.

All of this is enteratining but it's deviating somewhat from the topic of the thread. I guess I only responded to the UTCCR point originally to save people wasting their time including highly dubious legal opinion in the substance of their complaint.

In which case you are saying there's no way to legally challenge what the insurer has done in this case. I don't agree.

And I never stated that the FOS did define and clarify the law by the way.

No, you just sought to imply that they did by pointing out the framework under which FOS operate and that FSA do define and clarify the law. If you weren't implying FOS defined and clarified the law, your reference to FSA doing so was irrelevant.

raskazz

MarkyMarkD wrote: »

The FOS aren't commenting on a case where the insurer has cancelled and failed to pay any compensation. They are commenting on cases where the insured has cancelled. I'm not disputing, at all, that insurers should be able to charge cancellation fees. But they ought to pay the same compensation to customers if they cancel policies (other than in situations where the cancellation is due to the insurer identifying deception or similar).

Read the case study.

It doesn't matter that, in that particuar instance that it was the insured cancelling the policy.

"The firm said that if it cancelled a policy, then it would normally make a pro rata refund of the amount the customer had paid. However, when a customer cancelled the policy it did not refund any premiums if the cancellation was made four or more months after the start of the policy. When the firm rejected Mr A’s complaint about this, he came to us – saying he thought the firm was ‘grossly unfair’."

In other words, the FOS was considering the cancellation term in its entirity.

Again, if the presence of imbalance of rights alone was unfair then the FOS would not have asked the insurer how it worked out it's cancellation rates. If your opinion were correct it would have merely judged that the insurer's rights were not exactly the same as the insured's, and found in favour of the complainant on that basis.

I state again, the imbalance must be significant. I am not saying that there is no way to challenge it - I am saying that a challenge will fail. Knowing what Hastings's rates are - there is absolutely no chance that a legal challenge would succeed. That's my opinion as someone with a first in contract law from LSE.

Still - let me know when this legal challenge comes. Not that it ever will.

IronMan_4

I received my 7 day notice on the 14th. I phoned them numerous times to get some more information out of them and finally managed to get through to them on Friday. I asked for some information in writing, including the reason why the policy was being cancelled, notifcation of any refund due and a return of my NCB document. I was promised this by today at the latest, but i'm still waiting. Here’s what I got from the conversation anyway, it may be of help.

They are entitled to cancel polices giving 7 days notice. However, doing so when they are at fault and offering no compensation just shows the lack of integrity of both Hastings Direct and Highways Choice.

They don’t have an official complaints procedure. The operator recommended filing a complaint with their customer relations department. Following this, write a second letter to the FSA stating you are unhappy with what has happened. Both addresses are on page 4 of the policy booklet.

Refunds of premiums and NCB will only be on a pro rata basis.

They gave me a second quote for exactly the same policy and it was double. Naturally I declined this.

Polices affected. Postcode area 40 which for insurers is Liverpool, Manchester and Bradford. Also drivers aged 19 or under on a third party fire and theft cover.

There are over 3500 policies that are being cancelled.

Highway Choice. These are the underwriters of the insurance policies. If anyone wishes to complain to this company, they are on the web under the name Highway Insurance Holdings. The website is https://www.highway-insurance.co.uk. Their main number is 0870 443 1111.

Compensation. There are no plans in the pipeline to offer compensation. However, according to the policy booklet, Hastings are covered by the Financial Services Compensation Scheme and the policy holders may be entitled to compensation from the scheme if Hastings cannot meet their obligations.

The problems with the premiums resulted from a programming error. When I asked whose fault this was, the operator said he was told to say Hastings were responsible for it.

I would recommend everyone write letters of complaint to Hastings, the FSA, Watchdog and their local newspapers. Also writing to the Financial Ombudsman is a good idea as I read somewhere that they charge the company involved a fee for each letter received. This alone may make Hastings take notice of our complaints.

One final point, if you wish to ring them, don't use the phone number in the letter they send, they charge for this. They have a free phone number, 0800 022 3211.

MarkyMarkD

raskazz wrote: »

Read the case study.

etc. etc.

There would never be a need for a legal challenge. FOS will uphold a claim as the insurer's action in this case is unfair.

FOS's previous rulings were based on the unfairness of an insurer operating penal cancellation terms. If these cancellation terms had been symmetric, they might still have been treated as unfair. The symmetry or otherwise wasn't the relevant point in FOS's ruling on those cases.

But here it is exactly the symmetry which is at issue and it is the asymmetry which precisely leads to the unfairness.

Nobody's saying insurers cannot cancel. But to cancel without compensation when the insured has done nothing wrong, but to charge insureds cancellation fees when they cancel, is unfair.

I bow to your superior legal education but worry that LSE lets people have a first when they can't spell (or type) particular, entirety or its correctly. Or maybe it was the rush to get to your sarcastic denouement which led to the errors? :rolleyes:

MarkyMarkD

IronMan wrote: »

Also writing to the Financial Ombudsman is a good idea as I read somewhere that they charge the company involved a fee for each letter received. This alone may make Hastings take notice of our complaints.

The FOS will not act until you have reached deadlock with Hastings, and nor will they charge Hastings until they have decided that you have a substantive complaint.

Write to Hastings first, telling them that you will take your complaint to the FOS if they don't respond within 14 days.

Then write to FOS after 14 days, but not sooner, stating that you've reached deadlock with Hastings.