Hastings insurance trying to charge me for nothing

cw8825

bucket1 said:

retiredbanker1 said:

OP - Have you told your existing insurer too?

Yes, and they confirm it will not affect the premium if I renew with them.

cw8825 said:

Unfortunately it is not the insurers fault you wish to cancel. 
£20 is on the low side 

I disagree. The 28% increase in premium costs essentially forced me to cancel. While I agree that £20 isn't a significant amount, for me, it's about the principle.

They have set up a policy  quoted changes on a policy. Then cancelled the policy. 

All of these incur charges. Even with the £20 it’s still going to cost them money

All will be  in their terms of business that you agreed to when you took out their policy. Even allowing them the option to use any card details stored for arrears in this type of matter

ultimately if you refuse they are more likely than not just to write it off but would be within their rights to seek recovery 

dunstonh

Subsequently, they sent an email stating they would take the payment from a debit card they have on record. I responded, stating this is unauthorised and that if they proceed with the payment, I will instruct my bank to reverse it and report them for fraud.

Thats ok.  Their next step is to refer it to the debt collection agencies as a default.   That will destroy your ability to get credit for about the next 5 years.

Could you provide your opinion on my position here? The terms state there is a £20 fee if I cancel after 14 days, but does the 14-day period reset if they change the cost?

Cancellation periods are not free periods.   Firms are allowed to change administration costs and £20 is actually low compared to others.  There is also no fraud.  You have a debt, they have a payment method.  

Since the policy has not yet started, I have the right to cancel and shop around for a better deal. 

Yes, you have the right but that you appear to be mistaken on what cancellation rights mean.  

 I am not happy with Hastings for pricing themselves out and then attempting to charge me a £20 fee. It's not about the amount—£20 isn't a lot—but the principle of paying them £20 when they have attempted to overcharge me.

They are not overcharging you.  They are charging you based on your factual situation.   

 The 14 day cooling off period is usually intended to allow customers to change their mind or cancel their policy without penalty.

That is not correct. 

 While I agree that £20 isn't a significant amount, for me, it's about the principle.

You are gambling with your credit record.   Legally, Hastings are correct and your views are based on misunderstandings.

As it happens, looking at their website, this does not appear to be a cancellation charge.
https://www.hastingsdirect.com/about-us/our-fees/

It looks like the fee for arranging the policy in the first place and it does say it is non-refundable. Initial fees are don't become free if you change your mind.

DullGreyGuy

leonard_455 said:

I think you have a strong argument here.

 The 14 day cooling off period is usually intended to allow customers to change their mind or cancel their policy without penalty.

 However, in your case, the policy terms were changed by Hastings Direct themselves, which seems unfair.

 The fact that they increased your premium by 25% after you notified them of a no-fault accident is  a significant change from the original agreement.

 It is reasonable for you to want to cancel your policy and explore other options.

 As for the £20 fee, I think you have a right to object to it.

 Since the policy hasn't even started yet, it's difficult to know how responsible you are for  cancellation fees.

 The terms may say 14 days, but this is usually  the  start date of the policy, not  the date you accept the policy.

 What's worrying is that Hastings Direct is threatening to take payments from your debit card without your consent.

 You've made it clear that you did not authorize the payment, and if they continue, you have the right to report it as fraud and ask your bank to reverse the transaction.

 Overall, I think your arguments are strong and you should explore options for referring this matter, perhaps to the Financial Ombudsman Service or the Consumer Protection Authority.

Unfortunately you are wrong @leonard_455, there is no requirement for cancellations to be fee free even in the 14 day cooling off period for insurance. The charges however have to be proportional to the costs incurred by the business and a token £20 of which HMRC gets its IPT is almost certainly reasonable. 

The original agreement the OP signed up for included the term that they must inform them of any changes between purchase and inception with the insurer being able to rerate the policy based on the new information. Whilst the OP probably didnt go out there looking to be involved in a non-fault accident it's not Hasting's thats responsible for the change in circumstances. 

When you pay by card to an insurer you agree that they hold your card details under a continuous payment authority giving them the right to charge your card for any changes in premium or your following years renewal. So you are also wrong in saying the payment is unauthorised... it's the usual issue of people not reading what they are agreeing to rather than it being unauthorised. 

Making a false accusation of fraud to your bank is going to land you in a host of problems. Almost certainly Hastings would then void the policy for non-payment, something that will have to be declared for life. Any may load you to CIFAS as 1st party fraud, no intent to pay. The later would make getting any form of credit, banking services or insurance very difficult. 


No idea who you think the Consumer Protection Authority is, a google only shows up an Indian NGO 

GDCdotcom

An insurance contract is not binding within 14 days so they can't enforce anything in their T&C's. They can try and charge you, but it wouldn't stand up in Court. Also, they have changed the terms of the contract and you do not accept the new contract and you are not bound by the old contract yet.

For anybody disagreeing, I assessed insurance claims as a Director of an insurance company. A different field of insurance admittedly, but the rules apply no matter what the insurance risk happens to be. But hey, this is just a random reply in a forum much the same as the people above telling you to pay. 

Except this is the rulebook:

handbook.fca.org.uk/handbook/ICOBS/7/1 (I can't post links but you can easily search that text).

 

and the wording in ICOBS 7.1.1 is this: "A consumer has a right to cancel, without penalty and without giving any reason".

BarelySentientAI

GDCdotcom said:

 

and the wording in ICOBS 7.1.1 is this: "A consumer has a right to cancel, without penalty and without giving any reason".

Thanks for necro posting a 6-week old thread - but this wording is irrelevant.

There was a non-refundable arrangement fee.  There was no penalty for cancellation.

Non-refundable fees have been deemed acceptable by case law and Ombudsman precedent on several occasions.

dunstonh

Except this is the rulebook:

handbook.fca.org.uk/handbook/ICOBS/7/1 (I can't post links but you can easily search that text).

 

and the wording in ICOBS 7.1.1 is this: "A consumer has a right to cancel, without penalty and without giving any reason".

Now try reading 7.2  (here it is on pdf form https://www.handbook.fca.org.uk/handbook/ICOBS/7/2.pdf )

k12479

GDCdotcom said:

Except this is the rulebook:

handbook.fca.org.uk/handbook/ICOBS/7/1 (I can't post links but you can easily search that text).

 

and the wording in ICOBS 7.1.1 is this: "A consumer has a right to cancel, without penalty and without giving any reason".

Read on to ICOBS 7.2, specifically ICOBS 7.2.2 and 7.2.3.

Shocking that a 'Director of an insurance company' would not familiarise themselves with all the relevant rules.

DullGreyGuy

GDCdotcom said:

An insurance contract is not binding within 14 days 

So as the "Director of Claims" you are declining every claim that happens in the first 14 days after inception on the basis the contract is non-binding? I'm sure the ombudsman has a right laugh each time they see one of the complaints about you. 

GDCdotcom

DullGreyGuy said:

GDCdotcom said:

An insurance contract is not binding within 14 days 

So as the "Director of Claims" you are declining every claim that happens in the first 14 days after inception on the basis the contract is non-binding? I'm sure the ombudsman has a right laugh each time they see one of the complaints about you. 

When did I say that? A claim is a different subject entirely. We are talking about consumer protection regulations here, introduced in the 1990's that prevented insurance companies posting a huge contract after an agreement making all basis of a claim avoidable. I had very few disputes because I understood and followed the rules. Not that it's really any of your business.

A point the experts missed is that the terms of the contract changed and the other party was not bound by previous contract.

As for six weeks, well yes. I do other things as well as read forums and I guess if somebody reads this in a few weeks they might think about everything here and if it is relevant to their circumstances and why they looked in the first place.

ICOBS 7.2 lists exceptions, 7.1 establishes the precedent. Quite an important legal caveat if your company policy is a standard charge when none is technically allowed.

BarelySentientAI

GDCdotcom said:

DullGreyGuy said:

GDCdotcom said:

An insurance contract is not binding within 14 days 

So as the "Director of Claims" you are declining every claim that happens in the first 14 days after inception on the basis the contract is non-binding? I'm sure the ombudsman has a right laugh each time they see one of the complaints about you. 

When did I say that? A claim is a different subject entirely. We are talking about consumer protection regulations here, introduced in the 1990's that prevented insurance companies posting a huge contract after an agreement making all basis of a claim avoidable. I had very few disputes because I understood and followed the rules. Not that it's really any of your business.

A point the experts missed is that the terms of the contract changed and the other party was not bound by previous contract.

As for six weeks, well yes. I do other things as well as read forums and I guess if somebody reads this in a few weeks they might think about everything here and if it is relevant to their circumstances and why they looked in the first place.

ICOBS 7.2 lists exceptions, 7.1 establishes the precedent. Quite an important legal caveat if your company policy is a standard charge when none is technically allowed.

Except even if you hold to that interpretation - that isn't what 7.1 says.

It says "without penalty".  Not "with refund of all associated costs and fees".

Quite an important legal caveat if you are placing yourself as giving authoritative advice.