Excessive insurance cancellation fee

Jumblebumble

bit_fuzzy said:

Hello,
  Sorry if this has been covered but I could not find any previous posts regarding this, or if I’m even in right section. 

  I took out car insurance for £230.00 in April, starting cover 4th march 25. I could not afford to pay in full so I chose to pay monthly. My car broke on 31st May and I sold it 13th June. 

I tried to cancel car insurance and they wanted £141.26. This is an online policy and there was no way to contact them. Tried sending messages to automated service to no avail. I cancelled my direct debit in hope they would contact me. 

  When I did manage to talk to someone they could not give a reason why the amount was so much given the short period of cover. I was given several different reasons on different occasions as to why it was this figure. 

  I was told to get a v777 form and given 28 days to obtain. This is to show when I was no longer the keeper of the car. In this 28 days, it was handed over to a debt collection agency. I have given them the proof of sale of the car. They have reduced the amount to £121.24. I have told them that I have made 3 payments totalling £77.98, for the car insurance before I cancelled the direct debit which they have asked for my sort code and account number to show the payments. I have provided this to them as requested. They have now asked for bank statements showing payments. I have sent them a screen shot of payments made which they say their client will not accept. As I am unhappy to provide bank statements to a company and people I do not know, they are saying that I am liable for the full amount. 

  My question is where do I stand on this as I’ve always stated that I’m happy to pay the cancellation fee plus a month or so of the policy but paying nearly £200.00 for 3 months use seems a bit excessive on a £230.00 policy. 

I think the main questions you may want to consider are
How much would they have charged for a 3 month policy paid over 3 months assuming they would even have offered this option?
Who should be paying for the insurance brokers admin time in dealing with your disputing  their figures?
Who should pay the debt collectors time in dealing with you?
Should ordinary customers who keep to their side of the bargain pay for the cases where the insurance company do not recover their outlay or should this be passed on to those who do not keep to their arrangements.

I do fear that by not paying and cancelling your DD and disputing later you may find that insurance companies going forward may not be  particularly keen to want  your business

dumpster_fire2025

Jumblebumble said:

bit_fuzzy said:

Hello,
  Sorry if this has been covered but I could not find any previous posts regarding this, or if I’m even in right section. 

  I took out car insurance for £230.00 in April, starting cover 4th march 25. I could not afford to pay in full so I chose to pay monthly. My car broke on 31st May and I sold it 13th June. 

I tried to cancel car insurance and they wanted £141.26. This is an online policy and there was no way to contact them. Tried sending messages to automated service to no avail. I cancelled my direct debit in hope they would contact me. 

  When I did manage to talk to someone they could not give a reason why the amount was so much given the short period of cover. I was given several different reasons on different occasions as to why it was this figure. 

  I was told to get a v777 form and given 28 days to obtain. This is to show when I was no longer the keeper of the car. In this 28 days, it was handed over to a debt collection agency. I have given them the proof of sale of the car. They have reduced the amount to £121.24. I have told them that I have made 3 payments totalling £77.98, for the car insurance before I cancelled the direct debit which they have asked for my sort code and account number to show the payments. I have provided this to them as requested. They have now asked for bank statements showing payments. I have sent them a screen shot of payments made which they say their client will not accept. As I am unhappy to provide bank statements to a company and people I do not know, they are saying that I am liable for the full amount. 

  My question is where do I stand on this as I’ve always stated that I’m happy to pay the cancellation fee plus a month or so of the policy but paying nearly £200.00 for 3 months use seems a bit excessive on a £230.00 policy. 

I think the main questions you may want to consider are
How much would they have charged for a 3 month policy paid over 3 months assuming they would even have offered this option?
Who should be paying for the insurance brokers admin time in dealing with your disputing  their figures?
Who should pay the debt collectors time in dealing with you?
Should ordinary customers who keep to their side of the bargain pay for the cases where the insurance company do not recover their outlay or should this be passed on to those who do not keep to their arrangements.

I do fear that by not paying and cancelling your DD and disputing later you may find that insurance companies going forward may not be  particularly keen to want  your business

I don't think that will be an issue, but as almost all car insurance is annual cover (except for explicitly temporary cover) then the monthly payments will be to pay for a finance agreement which covers the annual premium. There's a good chance if this has gone to a DCA that that agreement will have been defaulted which will make it difficult to take out insurance on a "pay monthly" basis for some time and also affect taking out other credit agreements.

They might find it very difficult indeed to get any bad markers removed from their credit file if they willfully withheld payment.

born_again

dumpster_fire2025 said:

I don't think that will be an issue, but as almost all car insurance is annual cover (except for explicitly temporary cover) then the monthly payments will be to pay for a finance agreement which covers the annual premium. There's a good chance if this has gone to a DCA that that agreement will have been defaulted which will make it difficult to take out insurance on a "pay monthly" basis for some time and also affect taking out other credit agreements.

They might find it very difficult indeed to get any bad markers removed from their credit file if they willfully withheld payment.

Credit file/history is a matter of fact. You would have to be very lucky to get anything removed where a DD was cancelled.
Only real way is if the marker is added in error by company. Which if the DD was stopped would not be the case.

dumpster_fire2025

born_again said:

dumpster_fire2025 said:

I don't think that will be an issue, but as almost all car insurance is annual cover (except for explicitly temporary cover) then the monthly payments will be to pay for a finance agreement which covers the annual premium. There's a good chance if this has gone to a DCA that that agreement will have been defaulted which will make it difficult to take out insurance on a "pay monthly" basis for some time and also affect taking out other credit agreements.

They might find it very difficult indeed to get any bad markers removed from their credit file if they willfully withheld payment.

Credit file/history is a matter of fact. You would have to be very lucky to get anything removed where a DD was cancelled.
Only real way is if the marker is added in error by company. Which if the DD was stopped would not be the case.

They are but the FOS can be a law unto themselves sometimes.

eskbanker

dumpster_fire2025 said:

born_again said:

dumpster_fire2025 said:

I don't think that will be an issue, but as almost all car insurance is annual cover (except for explicitly temporary cover) then the monthly payments will be to pay for a finance agreement which covers the annual premium. There's a good chance if this has gone to a DCA that that agreement will have been defaulted which will make it difficult to take out insurance on a "pay monthly" basis for some time and also affect taking out other credit agreements.

They might find it very difficult indeed to get any bad markers removed from their credit file if they willfully withheld payment.

Credit file/history is a matter of fact. You would have to be very lucky to get anything removed where a DD was cancelled.
Only real way is if the marker is added in error by company. Which if the DD was stopped would not be the case.

They are but the FOS can be a law unto themselves sometimes.

Deliberately so, to a certain extent, in that their decisions aren't exclusively based on what the letter of the law states but entail woollier concepts of fairness, etc.

dumpster_fire2025

eskbanker said:

dumpster_fire2025 said:

born_again said:

dumpster_fire2025 said:

I don't think that will be an issue, but as almost all car insurance is annual cover (except for explicitly temporary cover) then the monthly payments will be to pay for a finance agreement which covers the annual premium. There's a good chance if this has gone to a DCA that that agreement will have been defaulted which will make it difficult to take out insurance on a "pay monthly" basis for some time and also affect taking out other credit agreements.

They might find it very difficult indeed to get any bad markers removed from their credit file if they willfully withheld payment.

Credit file/history is a matter of fact. You would have to be very lucky to get anything removed where a DD was cancelled.
Only real way is if the marker is added in error by company. Which if the DD was stopped would not be the case.

They are but the FOS can be a law unto themselves sometimes.

Deliberately so, to a certain extent, in that their decisions aren't exclusively based on what the letter of the law states but entail woollier concepts of fairness, etc.

Which is a problem when they make things up as they go along. Is there are particularly good reason why the FOS cannot adhere to the law?

It's another Blairite quango as far as I can see, hamstringing the country by non-accountable goons.

eskbanker

dumpster_fire2025 said:

eskbanker said:

dumpster_fire2025 said:

born_again said:

dumpster_fire2025 said:

I don't think that will be an issue, but as almost all car insurance is annual cover (except for explicitly temporary cover) then the monthly payments will be to pay for a finance agreement which covers the annual premium. There's a good chance if this has gone to a DCA that that agreement will have been defaulted which will make it difficult to take out insurance on a "pay monthly" basis for some time and also affect taking out other credit agreements.

They might find it very difficult indeed to get any bad markers removed from their credit file if they willfully withheld payment.

Credit file/history is a matter of fact. You would have to be very lucky to get anything removed where a DD was cancelled.
Only real way is if the marker is added in error by company. Which if the DD was stopped would not be the case.

They are but the FOS can be a law unto themselves sometimes.

Deliberately so, to a certain extent, in that their decisions aren't exclusively based on what the letter of the law states but entail woollier concepts of fairness, etc.

Which is a problem when they make things up as they go along. Is there are particularly good reason why the FOS cannot adhere to the law?

It's another Blairite quango as far as I can see, hamstringing the country by non-accountable goons.

I'm clarifying rather than justifying, but, as well as the law (which can always be enforced via the courts if necessary), they can take other matters into consideration under the terms of section 228(2) of the Financial Services and Markets Act 2000:

A complaint is to be determined by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case

Not sure how that constitutes 'hamstringing the country' though?

Ectophile

dumpster_fire2025 said:

eskbanker said:

dumpster_fire2025 said:

born_again said:

dumpster_fire2025 said:

I don't think that will be an issue, but as almost all car insurance is annual cover (except for explicitly temporary cover) then the monthly payments will be to pay for a finance agreement which covers the annual premium. There's a good chance if this has gone to a DCA that that agreement will have been defaulted which will make it difficult to take out insurance on a "pay monthly" basis for some time and also affect taking out other credit agreements.

They might find it very difficult indeed to get any bad markers removed from their credit file if they willfully withheld payment.

Credit file/history is a matter of fact. You would have to be very lucky to get anything removed where a DD was cancelled.
Only real way is if the marker is added in error by company. Which if the DD was stopped would not be the case.

They are but the FOS can be a law unto themselves sometimes.

Deliberately so, to a certain extent, in that their decisions aren't exclusively based on what the letter of the law states but entail woollier concepts of fairness, etc.

Which is a problem when they make things up as they go along. Is there are particularly good reason why the FOS cannot adhere to the law?

It's another Blairite quango as far as I can see, hamstringing the country by non-accountable goons.

The FOS has been allowed to continue through successive Conservative and Labour governments.  Who could have changed things if they had wanted to.

The FOS is not a court of law.  It is not their duty to rule on the law.  If you want to sue somebody in an actual court, that option is open to you.

dumpster_fire2025

eskbanker said:

dumpster_fire2025 said:

eskbanker said:

dumpster_fire2025 said:

born_again said:

dumpster_fire2025 said:

I don't think that will be an issue, but as almost all car insurance is annual cover (except for explicitly temporary cover) then the monthly payments will be to pay for a finance agreement which covers the annual premium. There's a good chance if this has gone to a DCA that that agreement will have been defaulted which will make it difficult to take out insurance on a "pay monthly" basis for some time and also affect taking out other credit agreements.

They might find it very difficult indeed to get any bad markers removed from their credit file if they willfully withheld payment.

Credit file/history is a matter of fact. You would have to be very lucky to get anything removed where a DD was cancelled.
Only real way is if the marker is added in error by company. Which if the DD was stopped would not be the case.

They are but the FOS can be a law unto themselves sometimes.

Deliberately so, to a certain extent, in that their decisions aren't exclusively based on what the letter of the law states but entail woollier concepts of fairness, etc.

Which is a problem when they make things up as they go along. Is there are particularly good reason why the FOS cannot adhere to the law?

It's another Blairite quango as far as I can see, hamstringing the country by non-accountable goons.

I'm clarifying rather than justifying, but, as well as the law (which can always be enforced via the courts if necessary), they can take other matters into consideration under the terms of section 228(2) of the Financial Services and Markets Act 2000:

A complaint is to be determined by reference to what is, in the opinion of the ombudsman, fair and reasonable in all the circumstances of the case

Not sure how that constitutes 'hamstringing the country' though?

You've only compounded what I've said, not argued against it.

I am fully aware that the FOS can legally "play jazz" when it comes to their decisions. That doesn't make it right.

PHK

The FOS is under investigation by HM Treasury and various senior people have left, precisely because of it's inconsistency and acting like a regulator. It's on warning that it is supposed to be a simple dispute resolution service. 


But coming back to this thread. I don't think this cancellation charge is excessive considering the finance, time on cover, admin costs, re-rating etc.