Swinton Home Insurance cancellation charge

dunstonh

by analogy, it would be reasonable for an airline to charge for fuel, pilots' & cabin crew salary, airport service charges etc. on a scheduled flight where the only passenger left the plane prior to departure. If this was a charter flight I would agree, but the analogy holds here because in both cases the business costs would have been incurred regardless of whether the policy had been sold / ticket had been purchased or no.

The analagy doesnt fit because in your case you got on the plane but wanted to get off after the journey started. The bulk of the work had been done. You didnt cancel it before it started.

raskazz

I'm not conflating anything. How does one work out the cost of setting up one policy other than dividing out the total cost of setting up all policies by the number of policies set up? All the costs I listed above have been reasonably incurred. Without them you would never have bought the policy.

Let's go back to the issue of bank charges, more specifically the OFT's view on credit card charges, where they ruled that they would not investigate any charges over £12. Seeing as the marginal cost of the credit card company in dealing with such matters is essentially nil, I certainly think that the relevant cost chargeable under the regulations is average cost rather than marginal cost. This seems entirely consistent with the regulations to me.

Centium5000 wrote: »

Moreover, the act of cancelling does not deprive the company of the opportunity to use its fixed capital to sell further policies and therefore it is independent of my purchase and not something I am liable for.

This is an interesting opinon but I don't think it holds any water in legal terms, as without all such costs you would never have bought the policy.

Centium5000 wrote: »

The point you make about the FOS not upholding any complaints in this regard is valid but not conclusive. In any complaint to a legally empowered body it is as much how the complaint is phrased / what it is that you object to as what has actually occurred. If I complain that Swinton is making a charge that should have been factored into the total cost of insurance, this is what will be investigated and ruled on (as in the second case study on the site). However, if my contention is that the admin charge is disproportionate to the actual costs incurred, my complaint will require a different line of investigation.

To be honest I think you're a bit naive to think that the FOS won't have already considered the matter at hand with reference to all relevant legislation.

krystal-divination

If you had bought the insurance straight from norwich union you would not have paid a cancellation charge just pro rata insurance costs for the 7days used.
Swinton from what you say are making this charge.

Best go straight to these companies rather than through a broker to avoid their charges in future.

best of luck

~~ K ~~

dunstonh

The FSA rules under ICOB in section 5.3.12 state that the firm has to disclose what charges it makes on cancellation:

The information about cancellation that the insurance intermediary must provide to the retail customer in accordance with ■ ICOB 5.3.4 R(3) or ■ ICOB 5.3.6 R(1)(f) is:

(1) the existence or absence of a right to cancel in accordance with
■ ICOB 6.2.1 R;
and

(2) where a right to cancel exists:

(a) the duration of the cancellation period, in accordance with ■ ICOB 6.2.2 R;

(b) the conditions for exercising the right to cancel, including
information on the amount which the retail customer may

be required to pay;

(c) the consequences of not exercising the right to cancel; and
(d) how the right to cancel may be exercised, including the
address to which the notification of cancellation should be

sent.


Swinton did document in accordance with these guidelines. So, why do you think that they shouldnt make the charge when a) they are allowed to and b) have complied with the FSA guidelines on disclosure?

gbogo

Swinton are incompetent and unhelpful. Don't use them.

_Andy_

gbogo wrote: »

Swinton are incompetent and unhelpful. Don't use them.

Congratulations on the most uninformative post seen on the boards today.

littlelally

I have cancellation with Swinton Brokers. Fully paid House and Contents Insurance (as I have done for many years) on policy expiring 30/9/09.
Had to cancel policy on 2/9/09 i.e. only 28 days prior to expiry. Didn't expect a refund but was shocked to receive demand for £40.55 (£50 less £9.55 refund).
This seems totally unreasonable as both they and the Insurance Company have
had their payments in full. The £50 cancellation charge is almost 33% of the annual premium.
Any advice please?

dacouch

Ask them why they have cancelled the policy when it was reasonable for them to know their cancellation fee would mean you owe them money when they could have just recommended to you to allow the policy to lapse on the 30/09/09 which would mean no refund to you but no fee so you would not be out of pocket.

Why have you cancelled the policy?

littlelally

Thank you for suggestion. I will incorporate the question into a letter I'm in the process of constructing. I'm not sure whether to mention Office of Fair Trading or Ombudsman at this stage. I don't want to antagonise them too early.


Reaon for cancellation of policy was change in domestic circumstances which I don't wish to detail on this forum.

One good thing has come out of my experience with Swinton. This is the first time I've had the courage to register on an on-line site and communicate with others. I'm relatively new to the internet and a very untechnical OAP to boot!

dacouch

The Swintons staff would be aware of their own cancellation charge and should have the intelligence to work out what would happen and to just advise you to let it lapse.

Swintons as do all businesses have to abide by the Financial Services Authority regulations, have a read of the FSA's "Treating Customers Fairly" principles. It might be worth mentioning these to them either verbally or in your complaint letter

http://www.fsa.gov.uk/Pages/Doing/Regulated/tcf/index.shtml