£45 adminstration charge to cancel Elephant policy

[pivn]

Having read my Credit Agreement regulated by the Consumer Credit Act 1974 I notice it states cancellation of my policy is subject to a £45 admin charge. I have written to Elephant requesting a breakdown of the admin costs. Do I have any legal basis to contest this admin charge, which in my mind is excessive?

[craigwalton]

AS long as it is purely an administration cost then I would say yes.

[pivn]

I've emailed Elephant and received this reply. I've also recently received a letter in the post threatening to refer me to a debt collection agency and a further £20 that I would have to pay if that is the case.

My email reply is below:

Thanks for contacting us about the cancellation of your policy. Your policy started on the 11/05/06 and continued until 10/08/06 when it was cancelled on a pro-rata basis with a £45.00 administration charge. The charge is calculated as follows :-

Total annual premium = £287.16
Days on cover x daily rate (including £45.00 fee) = £116.61
Total paid = £71.88
Amount outstanding = £44.73

[demon_x_slash]

Basically they've ignored your request for a breakdown of the admin charge. Request it again. Have you paid it, and want to claim it back, or not paid it because you're contesting its validity?

[pivn]

I have not paid as yet but am questioning the validity of the charge. I have sent another letter after receiving a reply via email:

Dear xxxx

In the email reply I received a fee of £45 is referred to that is specified on my Credit Agreement, that is regulated by the Consumer Credit Act 1974. The document states that cancellation of my policy is subject to a £45 administration charge.

I would draw your attention to Sections 19-22 of the Consumer Credit Act 2006 that repeal and replace sections 137-140 of the 1974 Act. This section makes reference to unfair relationships between creditors and consumers and particularly to bargains that are “extortionate” and grossly contravene ordinary principles of fair dealing. Section 20 of the act provides a court with various powers if it is found that a relationship between the creditors and the consumer is unfair.

This is the reason why I am requesting a detailed breakdown of the £45 administration charge. Any charges I am required to pay must be fair and reflect the costs of the service you are providing to me.


I'll let you know how I get on...

[pivn]

They cancelled the charge!

in the interests of good customer service, etc...

Still a bit peeved though as the day after Elephant's letter waiving the balance I got a letter from the debt recovery agency they hired which stated I had not responded to Elephant's reminders!

[JonCris]

Just shows how capable they are of lying doesn't it. Probably a standard letter