WARNING: Don't buy car insurance from ASDA ONLINE

These people at Asda Insurance are just rogues - although they say that what they are doing is legal, just seems like highway robbery to me. They've just managed to mug me for about £160.

Just like IanMonkey, I took out insurance on a car in May. This was a small second car for my daughter to use. It had been insured for a year with the AA, but I went on Confused.com (which I had used to insure my own, primary vehicle a few months earlier) and found the cheaper Asda quote for £236.

I chose this and paid on May 10 - a week before the insurance was due on the car. Unfortunately, during the following days, when sending off the driving licence/NCD details (requested many times by different Asda office workers, even when they had received the details, as a heel-dragging exercise no doubt), it emerged that Confused.com had used my previous details, for my other vehicle, which showed a 5+ years NCD.

The second vehicle I was now insuring only had one year's NCD. Upon finding this out, I asked Asda to re-quote for a one year's NCD. The quotation they gave me was so high - much higher than the AA's original quote - that I said it would be best to cancel the policy and refund me, since by this time, we were only a few days into the policy.

They said there was a £75 cancellation fee. This in itself is extremely high - the AA told me that most insurers charge about £25 for cancellation. Also, I was under the impression that there was some sort of cooling-off period when you took out insurance, when you could change your mind?

Anyway, I resigned myself, reluctantly, to the £75 cancellation fee and sent off the required documents by registered letter. I posted them on 27 May and received the cancellation document dated 30 May, but they then continued emailing me, as if this had never happened, asking for documents and threatening cancellation if I didn't supply them - which would have been funny if it hadn't been so teeth-grindingly irritating.

At £1 a minute, I spent endless time on the phone and finally spoke to a real person who then sent a letter saying that the policy had been cancelled on 30 May - that was 13 days after it had begun (two-week cooling-off period, anybody?)

Since then, I have had to write, ring and hassle them many times to get the refund. It finally arrived, dated 27 September ..... for £70.45. That's £160 less than I gave to them in May.

I spoke (again at £1 a minute) to someone in the complaints department today. He said that the costs deducted from the £236 were £14 for the 13 days before cancellation of the policy (OK, fair enough) the £75 cancellation fee, and then they charged £76.30 as a "non-disclosure fee" for the NCD error, which apparently, he said, is 20% of the entire cost of the insurance.

That they should charge this on a policy cancelled by me is in itself outrageous. But wait a minute, I said, 20% of the £236 I paid is £46 not £76. Ah well, said the man, it's 20% of what you would have paid if you had taken out the policy with the added £150 quoted to change the NCD to one year instead of 5+ years.

I was gobsmacked at this. They had charged me based on a premium for a policy which I had declined! "That must be illegal," I said and he insisted it wasn't - that the FSA approved this and it was in Asda's T&Cs.

This is all so underhand, if you ask me. I shall, of course, be reporting all this to the FSA and to the Insurance Ombudsman (I think there is one of these) but I wonder whether any of the other online insurance companies have this little scam going on, so that cancelling a policy still makes them a tidy sum by ripping off customers? I feel sorry for anyone who has an accident and has to make a claim from this "legitimate company". I'm sure they have a great many other loopholes which will get them out of paying up.