I took a policy out with adrian flux a few months ago now with an inital cost of £1,600 which I was to pay on monthly payments with their finance company.

When i first took the policy out with adrian flux they asked me if i had any no claims bonus which I informed them I did as i had 1 years no claims on a motorcycle license which I'd used before with another insurance company.

After sending them evidence of my no claims they were quick enough to get back to me that they couldn't accept this and that if i didnt provide proof of no claims my policy would bounce upto £4,000 which is totally through the roof.

I told them that Id asked if i could use my bikes no claims with them when i first took the policy out, they said they checked the phone records and had no recollection of this which is a total shambles.

I told them to cancel the policy as I couldnt afford to pay this and i was emailed this letter from them:

Further to the cancellation of your policy we can confirm there is now an outstanding balance on your account with ourselves of £815.19.

For the sake of expediency if we do not hear from yourself within the next 7 days, we will assume that you wish us to automatically debit the card that you used to pay for your insurance originally.

I just contacted them informing them that i dont even make this much money in 3 months and I have no way of paying this off in one payment, which i was then told that they would pass it on to their debt company who could allow me to pay it in smaller payments.

Any help as this is ridiculous as I informed them i had no claims on a bike and they still allowed me to take the policy out.

Your big mistake is that you did this on the phone so you have no record. Record your calls or do things in writing.

How long has the policy been in place?

Presumably it is a 12 month policy?

Early cancellation of a contract is a huge problem.

Most companies use this opportunity to impose hugely disproportionate charges and some companies even insist that you pay the entire fee for the whole of the remainder of the contract.

Gyms and mobile phone companies are especially bad about this - but so are insurance companies

Cancellation Charges

The rule about cancellation charges is that they must be proportionate.

This normally means that a cancellation charge must not exceed administrative costs which have been caused by your early cancellation.

This is because by cancelling your contract earlier than you were meant to, you are actually in breach of your contract.

The law does not allow a contracting party to make a profit out of the other party’s breach of contract.

This is basic contract law – but also any attempt to charge you a disproportionate cancellation fee is a breach of UTCCR 1999

How to cancel early

If you want to cancel early then you must give proper notice in writing.

Typically you should give one month’s notice.

Make sure that your cancellation letter is sent by recorded delivery.

Make sure that you keep a copy of it and you have noted on the letter the date you sent it – and you have stapled the recorded delivery slip to it.

DO NOT then simply cancel your direct debit and assume that this is the end of the matter. It won’t be.

The chances are that your Gym or Mobile phone company or what-have-you will ignore you and go on as if the contract is not cancelled.

Either that or they will tell you that they accept the cancellation but they expect you to pay for the rest of the subscription period.

If you have cancelled the direct debit – or if you stop making the payments, they will threaten you, send your file out to debt collectors, ruin your credit file and spoil your life for at least the next 6 years – even though the charges they are trying to impose are unenforceable.

Unfortunately you will have to force the company to obey the law.

This means that while the matter is in dispute, you must keep paying. This is essential and it will allow you to stay in control.

You can claim the money back later.

You must then prepare to sue the company in the Small Claims Court for their breach of contract in imposing unlawful charges – and also for the excessive charges which you were forced to pay them for fear of wrecking your credit file.

This may all sound extreme, but unfortunately, while these companies do not follow their legal obligations, this is the kind of action you will have to take.

Once you have won your case and you have a judgment against the company, then you can cancel your payments and take some satisfaction from instructing bailiffs to go in and collect the money the company now owes you.

If I were going to sue this company, I would also sue them for a breach of COBS as well.

Begin by asking them in writing for a breakdown of their cancellation fee.