Car insurance default.

BRB881

Bit embarrassed to be posting this but here goes…..
 My wife arranged insurance with the finance agreement set up with close brothers finance. She used an email that she rarely checks. 

I accidentally deleted the direct debit thinking it was an old one. We missed the payment on 3rd October. They emailed wife on 14th telling her that they would ‘send a letter shortly’ outlining what happens next. Yesterday we found out that close brothers had cancelled the agreement and issued a default on her file. 

Is this right for one missed payment? Seems very harsh. We accept our error, but I thought defaults were when a few payments were missed?

DullGreyGuy

Has the insurance been cancelled? That will be a much longer impact than anything loaded to a credit reference agency.

Finance linked to insurance tends to have very low tolerance to non-payment compared to general finance but then unlike a loan or car finance its very simple for them to cut their losses by terminating the insurance and most react quickly to that threat given it generally has to be declared for life. 

BRB881

DullGreyGuy said:

Has the insurance been cancelled? That will be a much longer impact than anything loaded to a credit reference agency.

Finance linked to insurance tends to have very low tolerance to non-payment compared to general finance but then unlike a loan or car finance its very simple for them to cut their losses by terminating the insurance and most react quickly to that threat given it generally has to be declared for life. 

Hi, yes it’s been cancelled. Thankfully direct line have offered us a policy. Apparently they only worry about cancellation if it happened due to fraud or misrepresentation. We were honest and upfront about the situation. It’s slightly more expensive than our previous policy but still reasonable. 

At the moment the default is our biggest issue as this seems like a very heavy handed approach for a payment that was 21 days late! 

sourcrates

BRB881 said:

Is this right for one missed payment? Seems very harsh. We accept our error, but I thought defaults were when a few payments were missed?

Those terms only apply to agreements governed by the consumer credit act.

An insurance policy does not fall into this category, so the insurer can default the account for non-payment under the terms and conditions of that insurance policy.

You would have agreed to this when you took the policy out.

BRB881

sourcrates said:

BRB881 said:

Is this right for one missed payment? Seems very harsh. We accept our error, but I thought defaults were when a few payments were missed?

Those terms only apply to agreements governed by the consumer credit act.

An insurance policy does not fall into this category, so the insurer can default the account for non-payment under the terms and conditions of that insurance policy.

You would have agreed to this when you took the policy out.

Hi, the credit agreement is covered by CCA- I checked this. 

sourcrates

BRB881 said:

sourcrates said:

BRB881 said:

Is this right for one missed payment? Seems very harsh. We accept our error, but I thought defaults were when a few payments were missed?

Those terms only apply to agreements governed by the consumer credit act.

An insurance policy does not fall into this category, so the insurer can default the account for non-payment under the terms and conditions of that insurance policy.

You would have agreed to this when you took the policy out.

Hi, the credit agreement is covered by CCA- I checked this. 

And what does your agreement say about when a default can be applied?

BRB881

sourcrates said:

BRB881 said:

sourcrates said:

BRB881 said:

Is this right for one missed payment? Seems very harsh. We accept our error, but I thought defaults were when a few payments were missed?

Those terms only apply to agreements governed by the consumer credit act.

An insurance policy does not fall into this category, so the insurer can default the account for non-payment under the terms and conditions of that insurance policy.

You would have agreed to this when you took the policy out.

Hi, the credit agreement is covered by CCA- I checked this. 

And what does your agreement say about when a default can be applied?

Sadly it does say that they can be applied after one failed payment 

sourcrates

BRB881 said:

sourcrates said:

BRB881 said:

sourcrates said:

BRB881 said:

Is this right for one missed payment? Seems very harsh. We accept our error, but I thought defaults were when a few payments were missed?

Those terms only apply to agreements governed by the consumer credit act.

An insurance policy does not fall into this category, so the insurer can default the account for non-payment under the terms and conditions of that insurance policy.

You would have agreed to this when you took the policy out.

Hi, the credit agreement is covered by CCA- I checked this. 

And what does your agreement say about when a default can be applied?

Sadly it does say that they can be applied after one failed payment 

Yep, that is usually the case.

Section 87 of the consumer credit act states that any breech must be remedied within 14 days.

If you fail to comply, they can take further action against you, which they did in the form of a default on your credit file.

Unfortunatly defaults are almost impossible to have removed, unless it was added erroneously.

BRB881

Update- I contacted close brothers today via email. I explained our eerie, apologises and also outlined the genuine stress that the default had created. To our amazement we received an email back telling us me that the default will be removed. Absolutely gobsmacked