My husband and I insured our scooter with Bennett's and were on a monthly payment plan. Then we sold the bike, and our new one wasn't ready to pick up, so we wanted to cancel the insurance. My husband phoned to do it, and they said it had to be in writing. So we sent a letter. They cancelled the policy.

Then, about two weeks later, after I'd shredded everything from Bennett's, we got a demand for about £68. They said we owed them a £30 cancellation fee, which I somewhat understood, even if I think it's stupid. The really bad part was that they charged an additional £38 as unpaid premium! When I phoned to try to figure out what the hell that was about, they said that because we cancelled before a full year was up, they retrospectively charged us at a different (higher) rate for the months that we did have the policy. So not only are we not getting a refund, they think we owe them!

I told them I thought the whole thing was ridiculous and we wouldn't pay any of it. They offered to drop £8 off as a 'goodwill gesture', and I told them that was unacceptable.

We thought if we ignored it they might just leave us alone, but the collections agency keeps calling and sending letters.

Anyone have a similar experience with an insurance company? What did you do?

Usually with motor policies, if the policy is cancelled before its normal end date, the insurance company will apply short term rates when working out any refund of policy. If the policy has run for more than 8 months, most companies won't even give a refund.

With regards to the DCA, I would contact them and advise them that you are disputing the matter with Bennetts. The DCA should then refer the matter back to Bennetts. Then you need to contact Bennetts and ask them to give you a breakdown of why they charge a fee of £30 to cancel a policy. This does seem excessive to me. You could always offer them the £38 that is owed in respect of the cancelled policy and see if they will waive the policy cancellation fee.