Automatic Renewals Danger

lauralu24

Hello all,

This is my first post so I hope that it is relevant and in the correct 'thread'.

I'm probably quite stupid for not knowing this but apparently automatic renewals are legal and common practice for insurers. My car insurance ran out this month and I decided not to renew my insurance but to sell my car. As I wasn't renewing I ignored my renewal quote (which was excessive to say the least!). You may know what is coming, the money was duly taken upon the elapse of my current insurance.

The problem: I didn't pay my insurance last time so the money has come out of a family member's account not mine! I just found out and have cancelled the policy but have been told the refund will be less £26.25 - a cancellation cost.

To say the least I am completely appauled that another person is paying for my failure to read a letter (if in fact this little gem of knowledge was in the letter). How can it be correct that my acquiescence is taken as authorisation to take money from an account which I have no authority over?!

Don't make my stupid mistake.

lisyloo

I didn't pay my insurance last time so the money has come out of a family member's account not mine!

The other person must have signed up to a direct debit or a continuous credit authority.
The should have understood what they were agreeing to.

To say the least I am completely appauled that another person is paying for my failure to read a letter

I sympathise but it's actually a lot worse than that.

1) You failed to understand the continual nature of the contract you signed.
2) You failed to read properly the renewal notice which would have RE-stated the position.
3) The other person failed to understand the nature of the financial agreement they signed up to.

I'm sorry you were caught out but it does sound like quite a few mistakes were made.

How can it be correct that my acquiescence is taken as authorisation to take money from an account which I have no authority over?!

You signed up to a continual insurance contract.
The other person signed up to a continual finance contract.

I'm really sorry you got caught but the only advise I can really give is that both of you need to understand what you are signing up to in future.

You can check terms and conditions up front if you like by going to the website and reading them, alternatively you can ask for a copy through the post.

missile

automatic renewals are legal and common practice ............... and quite useful for some

Jennifer_Jane

Hmmm! I'm fairly good at reading things, and certainly never want automatic renewals on insurance (cheaper to take out new/Cashback/Quidco, etc), but I also got caught out in November too! I never received a renewal notice from the Company (Barclays) and would have noticed this because the renewal amount increased from the previous amount, and from the new amount (also Barclays).

The lesson is to go through your automatic payments often to check what's going on, although I realise that in the OP's case this wasn't possible. I believe we should be given a tick/non-tick option for renewal.

Grrr!
Regards
Jen
xx

Tahiti

It was lucky you (or your family member) noticed! Imagine the arguments you'd have had 6 months down the line.

Automatic renewal is a good idea for some, but not for others!!

greyster

although automatic renewals are a pain in the !!! for us people who like to show no loyalty to companies to get the best deals, you got to think of the opposite scenerio.

What if the insurer didn't do an automatic renewal, and you accidentally drove around without insurance... and then crashed your car.

lisyloo

I believe we should be given a tick/non-tick option for renewal.

It's not up to you to dictate how companies run their business or what they offer.
You can of course choose not to deal with certain companies.

So the best way to deal with it is to check up front and don't take out a policy that doesn't suit your need.
Alternatively, buy a diary/calendar and put a note in it 30 days (or whatever period) before the policy expires.
Obviously it has to be something use but most people have some kind of diary or electronic organiser these days for remebering birthdays etc.

Jennifer_Jane

lisyloo wrote: »

It's not up to you to dictate how companies run their business or what they offer.
You can of course choose not to deal with certain companies.

So the best way to deal with it is to check up front and don't take out a policy that doesn't suit your need.
Alternatively, buy a diary/calendar and put a note in it 30 days (or whatever period) before the policy expires.
Obviously it has to be something use but most people have some kind of diary or electronic organiser these days for remebering birthdays etc.

Too, too patronising!

MarkyMarkD

She's not patronising, she's right.

All this boils down to is failure to read the renewal letter which would have clearly stated something like "you don't need to do anything as your premium will be collected by direct debit/debit card using the details you previously provided".

Companies adopt this auto-renewal approach because, for the 75%+ who renew with the same insurer each year, it's far easier and there's less risk of failure to be insured due to late payment. And because they make money out of the cancellation penalties for those who don't bother reading their paperwork.

It's not illegal to offer auto-renewal - it's no different to any other form of ongoing contract where the price can change, but the agreement is assumed to continue unless you specifically choose to cancel - for example your gas or electricity supply. Would you really suggest that you should get your gas or electricity cut off each time the price changes, because they should not be so presumptuous as to assume that you will accept their new terms? That's the exact parallel of requiring insurers to cease your insurance each year unless you specifically choose to renew.

It's just because insurance has conventionally been carried out in a different way to most other, ongoing, contractual relationships that it seems odd that insurers are now tending to move towards the more standard model.

Mon_mon

Customers are told about auto renewals at the time of purchase and they usually end up agreeing but they werent listening in the first place! It should also say on the renewal docs if the policy is going to auto renew so it really is down to the customer to chek properly
I find myself having to explain this about 4 times to custommers to make sure they know what they are agreeing to.

lisyloo

Too, too patronising!

Please point out to me which bit was patronising or wrong

Sorry, but I'm honestly confused.

If people choose not to read what they sign up to then that's their responsibility.
I'm sorry if some don't want to hear that but it's true.
It's not only in the initial contract but also the renewal letter so you do get a reminder.

You may not agree with the way some companies run their businesses but it's up to them how they choose to do it.
If you don't like it then you have the option of walking away and choosing one that suits you better.

I'm sorry if that isn't what you want to hear, but it's all absolutely factual so please don't shoot the messsenger because you don't like the message.