Not Bank But Car Insurance Charges

stevomufc1

Sorry, I couldn't find a section for this (maybe there isn't one?).

Basically, I wondering if this precedent of re-claiming bank charges could apply to car insurance?

There's thousands (maybe more) of people who have been stung with default charges for one reason or another - myself included and I have always paid my car insurance without fail in the 12 years i've been driving so to be hit with a penalty charge of £25 for 1 missed payment is a bit wrong in my opinion which is what happened to me last week.

For one reason or another, my direct debit wasn't taken - my car insurance never bothered to let me know. Several days later, they try to take it again and once again, it's rejected so a few days later after the second atempt, they email me to tell me of the failed payment - this is 2 weeks after the direct debit was due to go out of my bank (I paid straight away over the phone when the email came through).

After a few emails backward and forward, I don't seem to be getting anywhere with them in relation to finding out more information about this default "charge" ... I've explained to them that a charge is a fee requested for a service provided and asked them to tell me what service they have provided to warrant a £25 charge. They didn't have a clue and kept passing the buck to their finance provider who apparantly issue the charges and told me to see my credit agreement with them for information on this charge.

I've logged into the finance company's website and there's no documentation there to view - I'm going to give them a call later today to try and find out details of this so i'll report back later.

Nasqueron

The banks won the charges court case so not sure why you think that is relevant.

It's worth checking about direct debits though as I believe there is a guarantee and you could chase it up with the bank assuming you had the funds there.

dunstonh

Sorry, I couldn't find a section for this (maybe there isn't one?).

There isnt because what you want doesnt apply.

Basically, I wondering if this precedent of re-claiming bank charges could apply to car insurance?

You mean the court case that the banks won that put an end to reclaiming "unfair" bank charges?

For one reason or another, my direct debit wasn't taken - my car insurance never bothered to let me know. Several days later, they try to take it again and once again, it's rejected so a few days later after the second atempt, they email me to tell me of the failed payment - this is 2 weeks after the direct debit was due to go out of my bank (I paid straight away over the phone when the email came through).

Did you bother to let them know that there wouldnt be money in the account to pay your debt? It is all very well moaning that they didnt tell you but if you didnt tell them when its your fault then you dont hold any moral high ground.

I've explained to them that a charge is a fee requested for a service provided and asked them to tell me what service they have provided to warrant a £25 charge.

You created additional administration and defaulted on a credit agreement. If you do not pay for this extra work you caused then who is? Surely you are not suggesting that others should pay for your work?

stevomufc1

Thank you gentlemen for your input - i've not had chance to call them yet.

dunstonh, no - I didn't let them know that there wouldn't be money in my account to pay the "debt" as you mention because there was money in the account - why would you assume that there wasn't? there's plenty of reasons a direct debit can be refused.

You say that i created additional administration / extra work - that's all fine and dandy if that's the case but i'd like to know, what additional administration / extra work commands a £25 charge - surely it's my right to know this?

antrobus

stevomufc1 wrote: »

...dunstonh, no - I didn't let them know that there wouldn't be money in my account to pay the "debt" as you mention because there was money in the account - why would you assume that there wasn't? there's plenty of reasons a direct debit can be refused....

Indeed there are.

BACS ARUDD Report Reason Codes
0 Refer to Payer
1 Instruction cancelled
2 Payer deceased
3 Account transferred
4 Advanced Notice disputed
5 No account (or wrong account type)
6 No Instruction
7 Amount differs
8 Amount not yet due
9 Presentation overdue
A Originator differs
B Account closed

Which one was it in your case?

dunstonh

dunstonh, no - I didn't let them know that there wouldn't be money in my account to pay the "debt" as you mention because there was money in the account - why would you assume that there wasn't? there's plenty of reasons a direct debit can be refused.

If the bank returned it incorrectly then you complain to the bank and tell them the costs incurred and ask them to refund your out-of-pocket expenses to you.

My initial assumption was because you were comparing bank charges for insufficient funds with this. As it is not that, it is just another reason why there is not a comparison.

You say that i created additional administration / extra work - that's all fine and dandy if that's the case but i'd like to know, what additional administration / extra work commands a £25 charge - surely it's my right to know this?

No. its not your right. They do not need to justify their time to you. It just has to be in their published tariff and if it differs from that, then you have the right for a breakdown. However, we know that work is not priced by the minute or on an individual basis but averaged. So, someone creating 30 minutes of work will pay the same as someone creating 1 minute of work. That is just commercial reality and exists in all walks of life.

stevomufc1

antrobus wrote: »

Indeed there are.

BACS ARUDD Report Reason Codes
0 Refer to Payer
1 Instruction cancelled
2 Payer deceased
3 Account transferred
4 Advanced Notice disputed
5 No account (or wrong account type)
6 No Instruction
7 Amount differs
8 Amount not yet due
9 Presentation overdue
A Originator differs
B Account closed

Which one was it in your case?

None of the above - there was an "unusual transaction" on my account so the bank's fraud team froze my account as a precaution. Is there a reason you had to know this?

stevomufc1

dunstonh wrote: »

If the bank returned it incorrectly then you complain to the bank and tell them the costs incurred and ask them to refund your out-of-pocket expenses to you.

My initial assumption was because you were comparing bank charges for insufficient funds with this. As it is not that, it is just another reason why there is not a comparison.

Well, you know what they say about assumptions...

As above - the bank froze the account as a precaution so they wouldn't refund for this.

No. its not your right. They do not need to justify their time to you. It just has to be in their published tariff and if it differs from that, then you have the right for a breakdown. However, we know that work is not priced by the minute or on an individual basis but averaged. So, someone creating 30 minutes of work will pay the same as someone creating 1 minute of work. That is just commercial reality and exists in all walks of life.

I disagree - As a customer, I think they do need to justify a charge that reflects the amount of extra work they do. From what i was told by my insurance company, it's all automatic - a direct debit is automatic - if it's rejected, they will automatically try to take it out again - if it's rejected a second time, they will automatically send out an email to inform me of this. So... surely an automatic computer generated service doesn't warrant a £25 charge?

dunstonh

Well, you know what they say about assumptions...

Yes but we are both guilty of that.

I disagree - As a customer, I think they do need to justify a charge that reflects the amount of extra work they do.

No they dont. This is not an opinion but a fact. Justifications are not required for administration charges at consumer level.

So... surely an automatic computer generated service doesn't warrant a £25 charge?

How much did it cost them to implement that hardware and software? What about the disruption to cashflow and monitoring? The credit company will be involved as well as the insurer and cross communication required. All these things may well be partly or fully automated but that is not the point.

magpiecottage

From the insurer's point of view, I think a charge may be justified. They did not know why the account was frozen.

For the bank, it seems a little more difficult to justify. This was a regular direct debit and, whilst the bank would not have known exactly what it was for, it was clearly to another business authorised and regulated by both the Financial Conduct Authority and the Prudential Regulation Authority.

So I would complain to the bank in the first instance.

stevomufc1

dunstonh wrote: »

Yes but we are both guilty of that.

True...

No they dont. This is not an opinion but a fact. Justifications are not required for administration charges at consumer level.

How much did it cost them to implement that hardware and software? What about the disruption to cashflow and monitoring? The credit company will be involved as well as the insurer and cross communication required. All these things may well be partly or fully automated but that is not the point.

Sorry, I worded it wrong - It should have been worded; I disagree - As a customer, It would be good to know what i'm paying a charge of £25 for but you've sort of answered that for me and yes - I agree that both the insurer and the credit company would have been involved but from what i was told when i rang my insurer to pay over the phone, every step is automatic - even the part where the finance company informs the insurance company that the payment was refused - this is also automatic and the email is automatically sent out. Apparantly, even if i'd have noticed the amount was rejected the first time and paid it over the phone, the finance company would try to take the amount out again anyway as it was all automatic so i would, in essence, end up paying twice.

I'm not disputing that there should be a charge applied - I just think that the amount is unfair and they should apply a charge in proportion with the level of extra work involved.

I'll probably end up just forgetting about it and putting it down to one of those things but i'm just a bit annoyed that after so many years of being a loyal customer and never missing a payment, they couldn't do me the courtesy of letting me know in the first instance that there was a problem and giving me the benefit of the doubt whilst it the first time it's ever happened but then again, they're a business - not a charity and they will try and claw as much money as they can out of their customers.