Compensation for high admin charge

williamsp

Hi,
I recently moved house and notified my car insurer of a change of address. I was expecting perhaps a small admin charge, but was surprised when they said it would be £80!
When I queried this I was told by the agent that it was due to the admin charge and a higher premium. I queried why it would be higher as the area I was moving too was similar to my previous area and I would now be parking my car in a garage rather than a parking space outside my house which would be safer.

The agent was unconvincing and replied something about the fact I had moved to a new build house could bump up the premium which sounded nonsense to me. I wasn't happy about this so asked what was the cost to cancel and was told £90 plus underwriting fees. Needless to say I had no choice but to pay as I had just already moved in and didn't want to invalidate the insurance.

However, I recently read on the site about people who had challenged unfair fees similar to this so wrote to them explaining that charges had to be fair & reasonable.
They've replied saying all this was in the T&C's but as a gesture of goodwill are willing to refund £30, but if I go to the FOS this offer is invalid.

Do people think therefore £50 (£80 charge less the compensation) is still reasonable and so I should accept or go to the FOS ?

forgotmyname

As its not just an admin charge but a premium increase due to a change it would be hard to fight. I would accept the £30 and move on.

Aretnap

It's highly unlikely that the bloke who answers the phone at the insurer has access to the underwriting database. He just punches the details into a computer and tells you what number comes out. His guess as to why the computer has come in with that number is just that - a guess.

It's not unusual for parking in a garage to be more expensive than parking on street. The reasons are complex but part of it is because so many people make claims because they've damaged their car reversing into their garages - enough to outweigh any improvement in security which comes with parking in a garage. Also, modern cars are virtually impossible to steal without access to the keys, so the usual method for stealing them is to break into the house where the keys are kept and take the keys. If the car is in a garage it's easy to tell which house the keys will be in. If it's in the street the keys might be in any of a dozen or more houses. So the car in the garage is easier to steal.

You say the area is similar - in what way? Have you done a detailed study of claim statistics there over the last few years? Have you checked what the insurer would have charged you in the first place had you lived there from the start of the policy (that's the real test of whether the uplift is fair, whether or not you personally think the premium for the new area is justified)? Or do you just mean that the areas look vaguely similar to you, therefore the insurer should be obliged to charge the same for them?

I agree that if the £80 is predominantly made up of a premium increase rather than an admin charge then you will find it very difficult to challenge ut. I'd also take the £30 and call it quits. The alternative if you think the new premium is too,expemsive is to cancel the policy and take out a new one with another insurer which charges less for your new circumstances. But be warned that there'll likely be a fee for a mid term cancellation, which might wipe out any saving you make from a cheaper premium.

williamsp

Thanks for replies. I agree it would be difficult to determine how much of the increase is due to the premium but checking the documentation again it states any alteration/amendment is £60 which seems excessive as is the £90 cancellation charge. As stated by the MS Tip, fees should be fair & reasonable.

However, I think I will take the £30 compensation and move on as you say as even if I went to the FOS, it probably isin't worth all the extra hassle with no guarantee of any further compensation amount.

dunstonh

The agent was unconvincing

Of course he was. If he knew about pricing mechanics etc then he wouldnt be on the phone at a call centre.

However, I recently read on the site about people who had challenged unfair fees similar to this so wrote to them explaining that charges had to be fair & reasonable.
They've replied saying all this was in the T&C's but as a gesture of goodwill are willing to refund £30, but if I go to the FOS this offer is invalid.

They are refunding as a goodwill gesture as the fee is not unfair or unreasonable. They have decided that its cheaper to stop arguing the case with you and put it to bed.

o people think therefore £50 (£80 charge less the compensation) is still reasonable and so I should accept or go to the FOS ?

If you go to the FOS you will get nothing. The FOS has already published information that shows it rejects fees like this when they are published.

http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=58055
http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=60998
http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=58528

I agree it would be difficult to determine how much of the increase is due to the premium but checking the documentation again it states any alteration/amendment is £60 which seems excessive as is the £90 cancellation charge. As stated by the MS Tip, fees should be fair & reasonable.

There is nothing to say they should be fair an reasonable. Commercial reality means most are and that you get a few that push it but the FCA is not a price regulator. The requirement is that fees are published and you are charged as published.

mrsammyp

So according to the documentation, you must have paid a £60 mid-term adjustment fee and £20 additional premium.

Although slightly high the adjustment fee is not much more than other brokers/insurers would normally charge and your compensation has brought this down to £30, I would be glad that you even got that.

williamsp

"They are refunding as a goodwill gesture as the fee is not unfair or unreasonable. They have decided that its cheaper to stop arguing the case with you and put it to bed."

Nonsense, you've no evidence for this. If they didn't want to provide compensation they wouldn't, full stop. I only sent one e-mail.

"If you go to the FOS you will get nothing. The FOS has already published information that shows it rejects fees like this when they are published."

Strange then that a recent post by Martin, suggested that anyone should go to the FOS if they believe fees are not fair or reasonable. Perhaps your comments should be passed on to the moneysaving team to investigate as you contradict their information.

williamsp

mrsammyp wrote: »

So according to the documentation, you must have paid a £60 mid-term adjustment fee and £20 additional premium.

Although slightly high the adjustment fee is not much more than other brokers/insurers would normally charge and your compensation has brought this down to £30, I would be glad that you even got that.

Uh, no, it's brought it down to £50.
Also, don't agree it is not much more than other brokers/insurers charge. Fees vary widely and some do not charge for an address change.

FutureGirl

Surely it was stated in the T&C's what the admin charge would be...

Do you know how the £80.00 extra is broken down, into extra premium and charge?

FOS will side with the insurer on this one I reckon. They've already offered to reduce the charge by £30.00 as goodwill. It doesn't stop the extra premium from applying. If you go to the FOS to complain about the admin charge, all they will look at is the admin charge, as insurer has already offered to reduce this by £30.00 I don't see how the FOS can rule this as unfair.

nidO

williamsp wrote: »

Nonsense, you've no evidence for this. If they didn't want to provide compensation they wouldn't, full stop. I only sent one e-mail.

They haven't provided you with compensation, because they have nothing to compensate you for.

They've provided you with a goodwill reduction in their admin fees. At the £30 level this is basically "I can't be bothered to read your email properly and would like you to just shut up and go away" money which you would get from practically any complaint about almost anything to organisations like banks and insurers.

williamsp wrote: »

Uh, no, it's brought it down to £50.

No, it's brought it down to £30. You yourself acknowledged that your policy document states the admin charge is £60. £60 minus the £30 goodwill reduction is £30. You're confusing yourself with the remaining £20 which is your premium adjustment, and which either way you have absolutely no possibility of complaining about so is not at issue here.

williamsp wrote: »

Also, don't agree it is not much more than other brokers/insurers charge. Fees vary widely and some do not charge for an address change.

Given that this thread demonstrates you hadn't previously read your policy terms enough to have any idea what if any modification charge would apply to the policy you actually have, how is it you're now suddenly such an expert on charges across the market?
And also, what do you think this affects? Some providers don't charge admin fees, some do. You chose one that does, because you were attracted by the lower headline premium that comes with charging for other things like address changes.

dunstonh

Nonsense, you've no evidence for this. If they didn't want to provide compensation they wouldn't, full stop. I only sent one e-mail.

And if they say no, you would go on and on and maybe go to the FOS which can involve 3-6 months of admin back and forth.

It is far cheaper to pay a troublemaker to go away then have an expensive drawn out process. It is standard commercial activity. It is a not a compensation. its a pay off to get rid of you.

Strange then that a recent post by Martin, suggested that anyone should go to the FOS if they believe fees are not fair or reasonable. Perhaps your comments should be passed on to the moneysaving team to investigate as you contradict their information.

Those links come directly from the FOS. They are very similar to what you are saying. They are not my comments. They are real ombudsman decisions. I could link another 500 or so rejections if you wish. All real complaint outcomes by an ombudsman.

The FOS position is pretty consistent on this subject. If the charge is consistent with the published T&C then they will reject. There was more success on complaints like this a number of years ago as the providers often failed to publish their charges. So, they could not point to a published charge and that was often considered unfair. In those cases, a level of fairness was taken into account by the FOS and £50 was considered acceptable as a reasonable admin charge (with any premium difference on top). However, the issue has largely gone away with providers publishing their terms at point of purchase, on websites or tariff leaflets with the policy documents.

Also, don't agree it is not much more than other brokers/insurers charge. Fees vary widely and some do not charge for an address change.

There are two main pricing models. Lower premium plus admin charges or higher premium with no admin charges. So, dont compare higher premium/no admin charges here as you didnt choose to use one of those. Fees dont actually vary widely. £25-£75 is the typical range. Most falling around £25-£50. However, as one FOS rejection stated, the fact that others price differently is not relevant to the one you chose to buy.