Sharp Practice by M & S Home Insurance

[Rob S]

About a year ago I organised building and contents insurance for my parents in law with M & S. I also took advantage of their interest free instalments option and set up a direct debit from my own account to pay the monthly instalments. The final payment was taken on the 27th December so I cancelled the direct debit, as I knew that M & S were not going to be competitive for the coming year.

The policy expired on the 11th January and it was notable that M &S did not send a renewal notice.

My mother in law received a letter from M & S yesterday which I can only describe as extraordinary. The first thing the letter stated was that M & S had been unable to collect payment. As all payments had been made it was abundantly clear they were trying to collect a payment for a policy to cover a second year.

They asked my mother in law to contact them to confirm if she was cancelling the policy and they also stated that cancellation of the direct debit does not cancel the policy. Whilst I accept that, I am appalled at their failure to note that the policy had actually expired!

The letter then stated the following:-

"We would wish to advise you that if your policy is cancelled in this manner, this may affect your ability to obtain insurance in the future"

So it's ok for them to fail to send out a renewal notice and attempt to collect a payment without notifying the policyholder of the new premium, but if the policyholder is sensible enough to cancel the direct debit when all premiums have been paid it may affect their ability to get insurance in the future?

I regard their actions as unacceptable.The whole process of insurers carrying on taking payments automatically when a policy expires is wrong. Whilst some regard it as convenient, I do not see it as right that when someone takes out a 12 month policy that the insurer will automatically start a new policy effectively without consent. Failing to send out a renewal notice only compounds their actions and puts the whole process into the realms of sharp practice!

[LemonTwist]

They may well have sent out a renewal notice, but it could have been lost in the post or otherwise mislaid. Insurers are legally required to send out a renewal notice 21 days before the expiry of the existing policy.

I think the best thing for you to do is to phone them and ask them to clarify whether they did indeed send out a renewal notice. There is always a possibility that one of their internal processes could have gone wrong and failed to send out a renewal notice, as it is an automated process. If that's the case, then you shouldn't be penalised in any way for cancelling the policy now.

[Rob S]

My mother in law phoned up this evening to say that the renewal notice arrived today, 4 days after the expiry of the policy. The question remains as to why M & S were attempting to take funds from my account before the expiry of the policy.

[Rob S]

An update on this one. I wrote a letter for my mother in law and she received a telephone call from M & S customer services within a couple of days. They were very apologetic about a cock up at their end which had caused the letter to go and and also resulted in the renewal not being sent out. They promised to send a £20 gift voucher which arrived today with a covering letter with a un reserved written apology. Well done to M & S for accepting that they got it wrong!