Saga home insurance renewal problem

5A9Aproblem

My elderly mother is having trouble with Saga home insurance. It all started when she suddenly discovered a huge amount of money leaving her bank account at the beginning of last month. She doesn't get a full pension, so she keeps a close eye on every penny. This was quite a shock for her  but her bank was able to stop the payment, which they said was for Saga. She telephoned Saga and was put on hold for over half an hour. When her finally got to speak to someone, her cordless phone was running low on battery. The person she spoke to said they were automatically renewing her previous home insurance (which increased by a hundred pounds), it was not their fault she never received a letter by post about the renewal and they were to charge her a penalty fee for cancelling the new quote, which started the day before. She was very upset by this and told them to cancel the renewal, which she would never have agreed to, before her phone died. She called again the next day, once her phone was charged (it was the end of the day when she was able to get through the day before). Again, she had to wait for a long time to speak to someone. When she did, she discovered they never cancelled her renewal the last time she telephoned because the person said she was cut off. She later checked with her bank, who was able to stop the payment, which they saw as irregular, but a few days later, found that Saga had then refunded her, minus a huge penalty charge. She then received a letter by post (which would have been over a week since the money first left her account). This letter was dated almost a month ago and was about the renewal. She telephoned Saga, again having to wait a long time to speak to someone. The person from Saga didn't let her speak and repeatedly said she now owed them over two hundred pounds. She was really upset by all this. She later received yet another letter from Saga, dated over a week ago. This letter was a demand that she owes them over two hundred pounds for the renewed home insurance. I am really worried about her and I don't really know what her rights are. Saga seems to be determined to make money from her and she has been very upset by how aggressive they were towards her. She has spoken to me on a few occasions where local sales people (from big national chains) try to cheat her with upselling which they say was necessary or really pushing her to put down deposits for things she doesn't even want. 

DullGreyGuy

From an ombudsman point of view Saga are correct, they only have to evidence that they sent the renewal notification at an appropriate time and inline with regulations and cannot be held responsible if Royal Mail sat on it for weeks/lost it etc. unfortunately the law basically says something that is posted is received 2 working days later (first class) unless the recipient can prove otherwise. 

Was there a postmark or date on the envelope to suggest it may have been sent materially after the date of the letter?

What happened to her own diary for knowing when her home insurance was due? It's always risky to rely on letters arriving as the only mechanism.

Assuming you have no evidence to the contrary then we assume the renewal notice was sent when it should have been. With auto renewal, which most insurers require you to agree to when buying insurance, if the insurer doesn't hear anything they will renew the policy and take payment shortly after... this does save a lot of people who forget their renewal date and otherwise would be driving without insurance or risking their home burning down with no coverage. 

Having contacted them after the new policy has incepted they would be entitled to charge early termination fees, this would often be made up of a fixed fee to cover costs and time on cover at a "short term" rate. Given Saga are an intermediary it wouldn't be uncommon for there to be two cancellation fees, one from them and one from the actual insurer. 

The not following the request to cancel when the phone cut off mid call is a difficult one... they presumably hadn't told her about the fees at that point and many people do change their minds after further discussion so simply to cancel it and apply the fees could be problematic for them. What they should have done is called her back but if you say the phone had no battery then it would have just rung out. Certainly worth questioning them on what efforts they made to re-establish contact. 

What did she do about her insurance then? Did she buy elsewhere before this whole saga with Saga? It will certainly help her argument if she had, doesn't help it if she only does it now. 

The other thing to find out definitively is if they have cancelled it for non-payment or cancelled it from her instructions. Its not 100% clear as you mention both monies being returned less fees and fees still be outstanding. If they have cancelled her insurance for non-payment she will need to declare that to all her future insurers.

Brie

She then received a letter by post (which would have been over a week since the money first left her account). This letter was dated almost a month ago and was about the renewal

This was the bit that caught my eye.  Any chance she/you have kept the envelope?  If you had proof that this wasn't sent at the right time but was actually sent after the renewal date then she would have a very strong case for a complaint.  

And normally I'd say that perhaps she needs to be registered as a vulnerable customer given that she's old enough to collect a pension and one that is less than the full amount.  But Sage sells to this group of people so should be well aware that they have to treat them with respect and with some understanding that a portion of their clients might be on low incomes and not as computer savvy as the general population.  

I think that a complaint is warranted in any case but it will be helpful and go further if it's a bit clearer about what happened when.  So best to write it all out in point form with each point being a different date/action.

So:

• date 1, discovered large amount of money taken from account
• date 2, rang Saga to find out why the money had been taken, spoke to "Bob" who was very impatient and rude and said he couldn't help but then said policy would be cancelled immediately.
• date 3, rang Saga and discovered that policy had not been cancelled etc
• date 4, recd renewal letter from Saga data -month but the envelop shows it was posted on date 1, the same day I rang.

etc etc

5A9Aproblem

Thank you for your comments and advice. She still has the envelopes but they don't have date stamps, just a barcode and a string of letters/numbers (which doesn't resemble a date).

She relies on letters a lot, making it difficult for me to help her long distance (I'm unsure if Saga even has an email option). I will certainly look into VRS for her. She said she's been missing banking letters since the lockdowns. 

She took out a new home insurance just before the old one expired. That was before the money was taken from her bank account. With regards to the telephone call, they never called her back, as the landline still rings with the handset recharging on the unit. She was told about the penalty fee during this first call. English is not her first language and her age adds to the complication.

Somehow, sometime after her bank actioned the chargeback, thinking someone was taking money from her, Saga processed a refund minus fees. The second letter (dated after the refund from Saga) says she owes the original full amount on her credit agreement. They have a helpline, which is the number she has been calling. Otherwise, they only seem to be communicating with her by delayed letters. 

I will try and draft a compliant for her.

DullGreyGuy

The fact she did organise insurance elsewhere is a critical point to highlight and evidence. Insurers are typically more accepting of those that have than those that haven't.

5A9Aproblem

So they finally responded to her, after an investigation and agreed that the calls were handled poorly. They award her with a small compensation for the distress caused (so they are sending her more money). They did, however, say that the letter not arriving is outside of their control. They don't accept that the policy was wrongly auto-renewed and justified their reasons for doing so. They agreed she should have received a full refund (the amount stopped by the bank) and said they will not claim the additional amount refunded to her (their refund minus a penalty). However, if she does choose to insure with them again, she would need to pay that balance off (the refund minus the penalty, not the additional compensation). My mother does not want to hold their money (and don't actually want to use their services again). Their response did not say how she can return their refund, only to say it needs to be paid if she uses them again. I guess she now has to write to them to ask them how to send them the money without starting a new policy.