Hi All

Have a question - has anyone had the following scenario happen to them?

Your annual insurance, lets say for a car, is up for renewal but not liking the renewal quote you give them notice to cancel (giving plenty of notice!) and take out insurance elsewhere.

a few weeks later you get a new certificate in the post from your OLD company, so check your bank and find that they have debited the renewal amount.

A call to the company and they say 'oops, yes that shouldnt have renewed, we will cancel immediately and refund your premium' (No major issues getting it resolved and you think no more of it, a simple mistake)

it then takes about 5 days to get your money back. so they have had your money for sometimes as long as 10 days!

This has just happened to me for 2ND YEAR RUNNING with 2 different insurance companies. my thoughts are that even if they do this to only 10 people a day with a couple of hundred a pop they are earning some nice interest from us over the days they have our money sitting in their account!!

Anyone else experienced this? wondering if I am just unlucky or if more widespread and earning these companies some nice extra interest.

If you pay by direct debit, then more often than not the insurance policy will be on an "automatic renewal" i.e you'll be sent a renewal quote in advance, but if you dont respond (of if its not logged on the insurers system correctly that you have responded) then the policy will automatically renew, you will be sent documentation and the 1st payment will be applied from your account.

The reason the payments take so long to be refunded is simply because we have to have confirmation that the payment has cleared before we can refund it again. This can take anywhere up to 14 days for a bank to confirm (is all done electronically via BACS). As soon as the bank confirm the money has cleared, we will refund the payment to you.

This isn't a [problem], or a con, its just a product of technology advancement. This never used to happen back in the days where people had to ring up to renew the policy, its only now that people have to ring up to NOT renew their policy.

D.A

I always advise to cancel the DD. And I am also aware of various practices of sales staff in insurance companies who "renew" a policy to get a bit of commission when there are instructions otherwise.

I am sure some of these instances referred to are accidental, but I suspect there is a practice of not cancelling policies on purpose.

...This isn't a [problem], or a con, its just a product of technology advancement...

Computers don't make mistakes, they just do what they are programmed to do. In the first instance of such a mistake being found (i.e. payments taken when they should not be) you can claim a mistake has been made. At which point you correct that error. But companies know it nets them a nice earner indirectly, so they don't correct the error and let it continue knowing that there is little joe public can do to put a stop to it and knowing that the overseers can't be bothered with it either.

A computer will normally not renew a policy when told not to.

The problem is usually the operator failing to give the instruction in the first place.

A computer will normally not renew a policy when told not to.

The problem is usually the operator failing to give the instruction in the first place.

I don't disagree with what your saying here - Apologies, I was in still in rant mode after talking to a company over the phone, where computer error was blamed. It just gets my goat up.

In this case the OP gave notice to cancel and it did not happen.

This was either operator error (not intiating the cancellation).

Or system error (cancellation initiated but lost in transit).

First one is discipline, second one is negligence (if the same error had already been experienced previously).

Neither go anyway to stopping the money being taken, hence why your advice on cancelling DD (albeit after you have confirmed final payment has been made) is good advice. I do the exact same myself.

In response to the OPs original question, I found it happened quite regular, hence why I took more control of my accounts through online banking, ditching my conventional account back when online was a new thing.

If you pay by direct debit, then more often than not the insurance policy will be on an "automatic renewal" i.e you'll be sent a renewal quote in advance, but if you dont respond (of if its not logged on the insurers system correctly that you have responded) then the policy will automatically renew, you will be sent documentation and the 1st payment will be applied from your account.

 

The reason the payments take so long to be refunded is simply because we have to have confirmation that the payment has cleared before we can refund it again. This can take anywhere up to 14 days for a bank to confirm (is all done electronically via BACS). As soon as the bank confirm the money has cleared, we will refund the payment to you.

 

This isn't a [problem], or a con, its just a product of technology advancement. This never used to happen back in the days where people had to ring up to renew the policy, its only now that people have to ring up to NOT renew their policy.

 

 

D.A

thanks for the reponse - But -

payment wasnt by D/D. the whole premium was paid by visa debit card last year, (only way to cancel them from the consumer end is to cancel whole card after every transaction, rather tiresome!) they obviously retained the card details and deducted £229 quid from my bank account.

I responded to the renewal notice and gave plenty of notice to cancel the renewal of the policy, even had a long conversation with the agent (mainly one sided - him trying to persuade me to renew!)

Cancelation was confirmed on the call with a 'we will send you confirmation of no claims discount in the post to pass on to your new insurers' as a clear indication that he understood it was being cancelled.

Have confirmed with the bank, 'electronically' the funds cleared from my account the same day it was requested. it was confirmed in the possesion of the insurance company and already earning them interest on day 2 (that was last Friday) I called them on Monday educate them on the error of their ways They did have the actual nerve to try it on and say I would only be getting £217 back because i had been insured with them for 5 days!! I swear I could actually feel the blood pressure rise!

still yet to see a penny back in my account - Bank say they could have started the refund process on Monday, I would have seen my money on Wednesday - oops no, not arrived yet, insurance company squeezing some more interest out of mine and probably thousands ££££ of other ex-customers premiums.

from feedback from other sites i have also posted and from talking to people this does seem quite common and definately a good money making con for the insurance companies and obviously better than the good days of ringing up to renew as that didnt make them any money!

hopefully Watchdog will ask some pertinant questions!

I agree in principle with what you're saying. At the end of the day, if you have called the insurer in plenty of time to stop the policy being renewed, and they haven't done that, then that is really bad service from the insurer and needs to be followed up by their complaints procedure.

The same rule applies for refunds on cards as for direct debits. Confirmation that the payment has cleared has to be received before the refund can be applied back to the card/bank account.

I don't actually agree with automatic renewals and i very rarely offer it to the customers i deal with (although it is part of our scripts) as i believe its the customers choice whether to renew or not, we shouldn't assume they want to renew unless we hear otherwise.

However, i still stand by what i said in that this isn't a [problem] or a con, its just technology moving forward and the computer operators just simply not following the correct processes.

D.A

Auto renewal is a con full stop the insurance companies are out to make as much money as they can nothing wrong with that of course but lets face it how many people go with the same insurer every year not as many as there used to be prices are fluctuating so much these days and you can typically save about £100 by shopping around.

Insurance companies know this so they try and hold onto you by auto renewal

Only way to stop this happening is to cancel the debit with the bank soon as last payment has gone though.

PF

Obviously insurance is a business so of course they're there to make money.

However, with the introduction of the 14 day cooling off period by the FSA a few years ago, there is no point in the companies auto renewing policies maliciously as everyone seems to suggest.

All the customers would do is ring in and cancel and get their money back which would actually cost the insurer money by having to issue documentation for the policy, process the cancellation, refund the money and then send out more documentation to confirm the policy has been cancelled.

D.A

Green Insurance company sent me a ridiculous car insurance quote less than 14 days prior to renewal of £601.90. I didn't bother to read further and consigned it for recycle. Only whilst looking over the new insurance company required documents when asked for previous insurance quote for proof of 'no claims protection', it had to be recovered. Then I read the announcement that they have automatically renewed the insurance. Panic to stop a payment from bank. can't stop payment from bank, have to speak to insurance company. Blast! Insurance company is closed on Sunday=the day the insurance is to commence! This is the first time I have ever come across this 'auto renewal'. It MUST be made illeagal.