Rip off admin charges.........

money-4-nothing

lisyloo wrote: »

Hi Derrick,

I would agree with you if the payment was just for the labour but like many other people here I believe it's for lots of other costs as well.
Do you believe that the paper, ink, printers, computers, telephones etc. cost nothing to buy and maintain?
I personally believe that £25 is pretty cheap.

On a seperate note, what do you think is going to be acheived by discussing this further?
I have been listening and trying to keep an open mind to see whether any new facts have come to light in the discussion and I don't think they have (not for me anyway).

As these charges are legal and therefore have to be paid, then what do you think the purpose of further discussion is?

I am not sure that anyone here is going to change their mind and I don't think anyone here is influential enough to change things, so I'm starting to wonder if it's a waste of time.

Just my honest thoughts, no axe to grind.

Mmmm yeah pretty cheap... if you was on £300 a day. To alot of people £25 is half a days wages. To somebody who as £30MILLION in the bank that £100,000 car is pretty cheap as well.

£25 to change your address.... what aload of crap.

Do banks charge you for changing your address, Does BT or British gas charge you... INFACT even DVLA don't charge you for changing your name and address and theres a hell of alot more work involved in that i.e. printing a new driving license.

We should START charging these companies.... next time they ring up to offer you special deals say yeah i'll listen to you but it's going to cost you £25 per 5 minutes. WE have electric, phone line and other expensives TOO. :T

raskazz

derrick wrote: »

I am a fully qualified tradesman who undertook a full apprenticeship and have all the necessary qualifications to do the job I trained for.

Well given that you are (apparently) so well qualified you will understand the following - which I promise is the last time I will try to explain simple business realities to you.

Call 'C' the total cost to an insurer of providing all its customer services functions.

Then we can define C as being equal to the insurer's fixed costs (buildings, utilities, IT - things that they have to pay irrespective of the number of service calls they have to answer), plus the actual cost of all the individual calls they answer.

So we have:

C = F + cn

Where F = Fixed costs, c = (marginal) cost of taking 1 customer service call, n = number of customer service calls taken.

Now c is very small; F however is large.

If insurers charged admin fee equal to c (which is what I think you are arguing they should do), then how would they cover the fixed costs F? These costs are not included in the premium because consumers chase the lowest premiums.

Hence the admin fee charged, call it A, will be total customer service costs divided by the number of calls where a charge can be made. For the sake of simplicity assume that this number is equal to n (in reality it will not be as not all customer service calls result in an amendment fee).

So you are left with

A = C/n = F/n + c

Remember c is small but F is very large. This is why £25 is not a rip-off at all, despite your prejudice.

derrick wrote: »

if you are happy for these parasitic, (for an explanation of parasite/parasitic see a dictionary), companies to rip us off then fair enough, they rely on the gullibility of people like you, but I and others have a right to voice our opinions on them, if you don’t like it, tough, the truth hurts.

Oh dear. I am sure that my fellow forumers will decide that if anyone is gullible here, it is not me. As to the truth - I know whose version of events most closely resembles the truth.

Do you have any evidence of insurance companies making supernormal profit? You are aware that motor insurance is actually one of the most competitive markets in the whole economy and that a lot of motor insurers are loss-making and subsidised by other areas of insurance business aren't you? Indeed it is this heavy competition that is to blame for insurers stripping the costs of admin out of premiums, and charging them explicitly instead.

derrick wrote: »

Regarding T&Cs, I have explained my point re the Ops post, and moving address, don’t forget that T&Cs in a contract are not always legally enforceable, a point the banks are finding out re their “unlawful” charges, that is why we have the Unfair Contracts Act, and you cannot sign away your legal rights by signing a contract no matter what is in it!

"Unfair Contracts Act"? Are you referring to the Unfair Terms in Consumer Contracts Regulations or the Unfair Contract Terms Act? Because the latter does not apply to insurance contracts, and a fee of £25, provided it is specified in documents, will never be deemed unfair under the former.

olly300

Do banks charge you for changing your address, Does BT or British gas charge you... INFACT even DVLA don't charge you for changing your name and address and theres a hell of alot more work involved in that i.e. printing a new driving license.

The RBS has introduced charges for people who don't change their address details with them within a certain amount of months after they move. In addition these admin costs are likely covered by the charges banks put on people who go overdrawn. So if you go overdrawn you are subsidarsing people who don't go overdrawn. Also when you pay in a cheque or do a electronic bank transfer there is a few days delay before the money hits your account, where the bank earns interest on the money.

BT gives you a monthly charge for line rental. In this monthly charge they include admin costs. So if you never call BT you are subsidising people who do.

British Gas unit price or standing charge includes a cost for admin. So if you never call British Gas you are subsidising people who do.

DVLA is not a business.

So in short your comparison, money-4-nothing, uses 3 businesses who have completely different business models, and one government agency.

We should START charging these companies.... next time they ring up to offer you special deals say yeah i'll listen to you but it's going to cost you £25 per 5 minutes. WE have electric, phone line and other expensives TOO. :T

In certain cases when a company mucks up and gets to the point where you have to involve regulators or take them to court, you can charge them admin. I've managed in the past to get a utilty company to write off a entire bill by contacting the regulator. The bill was about £40 and more than covered any administration costs I spent phoning up the company three times (once at work so no costs for me) and writing to the regulator.

MarkyMarkD

This part of derrick's postings makes me worried about him and his rational assessment of risk.

derrick wrote: »

The only insurance that I carry is for my car, and that is only because it is legal requirement, if it wasn't I would not have that either.

So, if it wasn't a legal requirement, derrick would be happy to pay for a new Lamborghini or Rolls-Royce to replace the one he could write off tomorrow after a bit of a mistaken manouever in his car?

Anyone who thinks that is a rational way to behave is obviously tuppence short of a shilling.

Most of the whole three pages of posts on this thread are missing the point. (And respect to dunstonh (and there may be others) who have pointed out what I'm about to say.)

The £25 charge incorporates profit. It may, indeed, incorporate £22.50 of profit and the "true cost" may be £2.50. So what? Insurers are businesses and they are allowed to make money. They specify all their charges up front - they are legal and part of the contract.

As others have posted - ad nauseam - there are insurers who do not levy such charges, or charge less. If you want to have the option of paying nothing (or less) if you move house, then choose one of those insurers.

If you think there is ANY chance of moving house in your year of insurance, you need to undertake a rational consideration of whether the likely impact of the £25 amendment fee makes the policy poor value overall.

Really it is such a small amount that it's unlikely to change your decision making process, but if you are in rented accommodation and if you tend to move several times a year, I can just about see it being relevant.

MMD

lisyloo

Mmmm yeah pretty cheap... if you was on £300 a day. To alot of people £25 is half a days wages. To somebody who as £30MILLION in the bank that £100,000 car is pretty cheap as well.

Hi money-4-nothing,

I was not comparing it to people's ability to pay.
I was comparing it to the costs to the business of doing the change.

If people are really poor then they should probably try to avoid too many house moves as the relocation costs are usually a LOT more than £25.

This has been stated many times (and this is the final time) but the costs are:

Staff labour including employers NI, pension scheme, sick pay scheme
Support staff salary e.g. admin person that orders the paper, team leader
Consumables - paper, ink, envelopes
Software to make this change
Computers and telephones provided to support this operation.
Desk, rent, electricity.
Maintenance costs for hardware and software.

Most of us accept that ALL of these costs contribute to the change and I think £25 is good value.
If someone can't afford that small amount then they'd better be extremely dilligent in calculating the cost of their house move as estate agents fess, solicitors, stamp duty etc. are MUCH more expensive.
Even if renting the relocation costs are a lot more.

Do banks charge you for changing your address, Does BT or British gas charge you... INFACT even DVLA don't charge you for changing your name and address and theres a hell of alot more work involved in that i.e. printing a new driving license.

They don't charge you directly, but I can assure you that they don't do the work for free. It's included in their charges somewhere else.
Car insurance companies do not include it upfront anymore.
If you want to blame anything then blame it on search engines, best buy tables and the herds of people who simply buy the cheapest quote without knowing what they are signing up to. They are merely doing it to stay competitive.
If you think these other businesses do changes for FREE without covering their costs elsewhere then you are mistaken.
They DO charge for it. It's just packaged in a different way so it's not explicit.

Personally I prefer the way car insurance does it because it means that I don't have to pay for people that decide to move house a lot, but that's irrelevant as you or I don't get to deciede on the charging model.

We should START charging these companies.... next time they ring up to offer you special deals say yeah i'll listen to you but it's going to cost you £25 per 5 minutes. WE have electric, phone line and other expensives TOO.

I wholehartedly agree with you.
I have already sent one letter on this subject to Royal Mail about their unsolicited deliveries.
I do not intend to collect, store and transport their rubbish for nothing.

Again if you really don't like these charges, why take out a policy with them?
Why not get a policy that doesn't have them.
It's really quite simple really (and you don't even need to forsee you are moving house to do this).

lisyloo

The only insurance that I carry is for my car, and that is only because it is legal requirement, if it wasn't I would not have that either.

I think this is alarming but in a slightly different way to MarkyMarkD.

Derrick clearly does not care less about any innocent road user who could need a lifetimes care after an accident (which almost certainly Derrick couldn't pay from his own pocket).

So clearly he has a lack of compassion and empathy.
He is then surpised that a profit making business wants to make money and that this group (some of whom plan their lives well) are unsympathetic about the charge for people who don't appear to plan their lives well or read their policies.

This is somewhat contradictory and I smell a rat.

The selfish statement above either means that Derrick is a bit unbalanced or a troll.

I'm sure he would have plenty to say if one of his loved ones was affected for life by a car accident but unable to get decent compensation because the driver was insured.

Oh...there's always the MIB.....Oh yes, the rest of us pay the costs for uninsured Derrick,,, that's fair then.

Not sure what you want mate, but if it's sympathy, empathy or support I think you've come to the wrong place.