XS Direct 3k Total Excess - Worried regarding Debt Collectors

[BazzaS]

My car is an 07 plate vauxhall corsa SXI. The policy was taken out 1 month after I passed my driving test so I had no cancellations on anything nor bans nor any mods. Just a horrid policy.

 

a.k.a a new / young driver's policy .....

 

As you have found, the issue isn't so much the value of your 07 plate car but that of the "other car(s)" yours might be involved in an incident with.

 

If you were also quoted a higher premium for a policy with a lower excess, I'd agree that there wasn't unfairness, just the opportunity to choose to assume the extra risk for a lower premium.

 

The fact that both premiums were higher than you'd want to pay doesn't make them unfair.

[unclebulgaria67]

You miss the point Bazza. This xs direct policy is pretty unique to lower end of the market, with a third party excess. People are buying a debt policy.

[Jayden1994]

I was thinking about your case this morning and you might want to think about the following.

 

IF it looks like the FOS believe that Insure your motor did advise you sufficiently about the £3k all section excess and xs direct are legally correct in offering such a policy, then you might want to concentrate on the debt repayment argument.

 

You might then be able to persuade the FOS to partially uphold your complaint on the basis that the policy does not include debt repayment terms that are fair to policyholders. If xs direct should seek debt repayment over a minimum of say 3 years and if this is accepted by the policyholder within say 21 days, the threat of cancellation is lifted, then that would be reasonable. To simply create a £3k liability in the policy terms and threaten cancellation followed by debt collection is not adequate. It does not offer any protection to consumers from getting into a potentially ruinous position.

 

That is my current argument that I raised with the FOS separately last week against XS Direct all included in that word document I sent to yourselves here.

[Ganymede]

You miss the point Bazza... People are buying a debt policy.

 

No they are not.

 

This situation has only arise because the OP caused an accident.

 

The OP was a young, high risk customer and the premium reflected this.

 

As it happens, the insurer was correct to consider the OP a higher risk.

[BazzaS]

You miss the point Bazza. This xs direct policy is pretty unique to lower end of the market, with a third party excess. People are buying a debt policy.

 

I disagree. They are buying a policy with a large excess, and benefitting from a lower premium as a result.

The debt aspect only kicks in if they become liable. Otherwise they take all the benefit but with no assumption of risk.

 

Where I agree is that it may then be unfair to insist on that whole sum on demand, bearing in mind it is the "higher risk, lower monthly sum available" end of the market, which is why I agree with your suggestion the OP aim to come to a payment agreement.

 

I don't think they can say "I shouldn't have to pay the excess" : that was the risk they took in choosing that policy.

However, they shouldn't have insurance cancelled for not being able to stump up 3k in one lump sum.

[unclebulgaria67]

No they are not.

 

This situation has only arise because the OP caused an accident.

 

The OP was a young, high risk customer and the premium reflected this.

 

As it happens, the insurer was correct to consider the OP a higher risk.

 

A standard car insurance would not mean a debt would be incurred after an accident.

 

The unique feature of the xs direct policy with the £3k third party xs is that it includes a debt obligation of up to £3k after an accident.

 

The consequences could be very serious indeed and there should be a compulsory health warning advised at point of sale. From what i gather, no such warning was issued.

 

In addition to the health warning, xs direct should automatically offer repayment over a long period and if agreed to, the threat of cancellation should be withdrawn.

[Jayden1994]

thanks to everyone for their input thus far. It is much appreciated.

 

I am awaiting a response from my FOS investigator firstly from advancing the initial dispute with my brokers to an ombudsman and also my secondary dispute which she has filed directly to XS Direct. Both encompassing the same information that was within the word document I sent you all here. I will keep you all updated. Whilst I do agree that I took on the responsibility upon purchase of having a 3k excess. It was not explicitly explained to me as uncle has said how the debt will be managed.

 

Something stated a while ago as well was the fact that If someone was to have had 2 fault accidents within a short time frame, They would be asking for a collection of 5k upwards... A sum like that given to someone like myself would actually be extremely ruinous to my life and my financial situation.

[Jayden1994]

Hi all

 

Just a minor update that I felt I should ask you all for your opinion on.

 

After receiving all the info and phone transcripts over email from my FOS Investigator in relation to my initial dispute against Insure Your Motor I decided to listen to the whole call at sales point once more.

 

An alternative was offered for a substantial amount more with lower excess but one thing that did slightly shock me from listening to all the transcripts over and over is that the representative made sure I was financially able to cover the monthly cost of my premium without it effecting my other financial responsibilities.

 

It seems extremely hypocritical for a company to ask this to cover themselves and assure themselves that the customer will be paying them on time monthly but will not ask any further questions regarding how one would repay a colossal debt of £3000 if a fault accident occurred.

 

Both run along the same principle of repaying some form of debt or money owed.

 

What do you guys think?

[unclebulgaria67]

They should have discussed the all sections excess more, as that was key to deciding if it was suitable.

If they had said to you, that you must have £3k available should you have a fault accident, then would you have bought the policy ?

They might have offered another choice, but you were comparing the £3k excess quote with quotes you had obtained elsewhere.

[Jayden1994]

Yea I understand.

 

Whats your view on the point I made near the end of the post above though, regarding them explicitly explaining and asking me regarding monthly payments and if I am able to make them whilst taking other financial responsibilities into question but not explicitly explaining debt repayment nor the all sections excess properly.

 

Regards

 

J

[unclebulgaria67]

Don't know. I suppose they just wanted to know you could afford the monthly amount due, as part of discussing payment.

The bit about the excess was earlier in the conversation and seems insufficient to make an informed choice.

[Ganymede]

If they had said to you, that you must have £3k available should you have a fault accident.

..

 

Does that really need explanation?

 

What did the OP think would happen?!

[Jayden1994]

Honestly to new drivers who were given 0 guidance and knew hardly anything regarding cars/ insurance etc I assumed it did not include third party claims at all like I thought 99% of every other policy did.

 

I also think they are very clever with how they sell the policy over the phone at sales point. They know full well that young drivers primarily purchase this, Inexperienced and all in a rush to get on the road.

 

My salesmen in particular started enthusiastic but after listening to the transcripts the moment it comes to explaining the excess briefly, His tone drops and he somewhat mumbles the extremely brief explanation at a faster pace in addition to not re-mentioning the actual figure of £3000 Incase buyers actually hear it again over the phone and have a change of heart, Simply says "all sections excess". Just a heads up for anyone who may be reading this, I feel its an easy way to rope young drivers in from the start.

 

Anyways, Thank you all once again

 

Will keep you updated

 

Regards

 

J

[unclebulgaria67]

Does that really need explanation?

 

What did the OP think would happen?!

 

Yes, under ICOBS Insurers are required to explain any unusual policy terms and ensure they are understood. From what the OP transcribed from the call earlier in the thread, the brokers simply said, the policy has a £3k all sections excess, do you understand that.

 

The argument is whether the call scripting is adequate to meet with ICOBS. If i had written the call script, it would have said, the policy has an unusual feature of a £3k excess applying to all sections including third party claims. This means that if you had a fault accident, the Insurers would settle the claim and you would be asked to refund the Insurers up to £3k. If you failed to pay the Insurers, the policy would be cancelled and the amount would be subject to debt collection. Please confirm you understand this before you continue further.

[Jayden1994]

Hey all

 

Hope you are all well.

 

Seems like XS Direct are taking their time replying to my secondary dispute I filed little ago via my FOS Investigator and the Ombudsman is taking his time on my initial dispute which I escalated so no sure updates as of yet.

 

I did have one more question for anyone.

 

I tried a while ago to get out of this policy by cancelling around half a year in or so.

 

I was rejected and told I'd have to repay the rest of the premium (near a grand) to be allowed to cancel properly.

 

Was I lied too because I just spoke to my insurers and they told me I can cancel whenever for a small cancellation fee.

 

Just got me thinking.

 

Kind Regards

 

J

 

*Just spoke to my current insurers (now Hastings Direct)

[unclebulgaria67]

If you read page 30 of the xd direct poliicy wording the cancellation terms are fully detailed.

If you cancel mid term, you don't get a pro rata refund.

E.g Cancel 3 months into the policy and you have to pay 50% of the annual premium.

 

So you may have been given correct information.

 

As you have come to realise, you really have to read Insurance contracts before buying and certainly within the 14 day cooling off period.

If you don't then you might get into a situation that is very difficult.

 

There is a limit as to how much Insurers/brokers can tell you on the phone when buying insurance, as otherwise each call would last an hour.

You will always be sent insurance contract documents and have time to phone up to question the terms.

 

As for your complaints you might be waiting until the Autumn before any final outcome.

[Jayden1994]

Ah alright that clears it up.

 

Thank you

[dacouc]

The Ombudsman may disagree that XS Directs cancellation charges are acceptable as the FOS would not normally accept that level of charges for a cancellation unless the Insurer can justify it.

 

The Insurer may argue that due to the profile of the type of drivers they attract they need high charges to cover the costs of drivers taking cover out and then cancelling or defaulting part way through the policy

 

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/54/insurance.htm

[Jayden1994]

Hi all quick update

 

I've had a response from both the Ombudsman himself regarding my Insure Your Motor dispute and a "Final Response from XS Direct after filing a separate dispute as you all know, I will link them below.

 

Insure Your Motor - Ombudsman Response - http://imgur.com/a/qfxGG

XS Direct - Final Response - http://imgur.com/a/5mnhH

 

The initial response regarding Insure Your Motor I think we all knew was coming we was just buying time. But regarding the response from XS Direct of which the dispute was exactly the same as Insure Your Motors one, They seem to have only focused on the mis-selling part of the dispute and not the actual fact of my complaint regarding how the policy is structured and how debt management is not explained nor covered and the breach of ICOBs.

 

I am confused as to what my next stage is, When you have a moment please let me know your thoughts

 

Thank you, Much appreciated as always

 

Regards

 

J

[unclebulgaria67]

Images not very clear to read properly.

 

Suggest you reject ombudsman decision in regard to Insure you motor, given complaint with xs direct still active and they have pointed to sales process. If you accept FOS decision, in theory you accept sales process.

 

The main point with xs direct is the debt, threatened cancellation and no repayment terms. That is not something insure your motor could have explained within sales process.

[Jayden1994]

I'll reject it

 

What should my step after that be though in regards to the XS Direct complaint?

 

Shall I outline "The main point with XS Direct is the debt, threatened cancellation and no repayment terms. That is not something insure your motor could have explained within sales process." to my FOS Investigator and ask her to file the report or?

 

It is starting to seem like I am fighting a losing battle and It is worrying...

 

Here's clearer edits by the way.

 

Insure Your Motor - Ombudsman Response - http://imgur.com/a/pc3vH

XS Direct - Final Response - http://imgur.com/a/Q2zi2

 

Regards

[unclebulgaria67]

Yep, respond saying you believe the sales process was not adequate, even if anyone accepted the type of sale was non advised, leaving the consumer to read and understand the terms of the policy sent out.

 

That xs direct do have joint responsibility with insure your motor as their agent to treat policyholders fairly.

 

To expect policyholders to have £3k available to pay after an accident and if not available to further damage a consumers financial life by cancelling a policy.

 

This is grossly unfair.

 

No attempt was ever made to offer repayment terms over a reasonable period, even if this was not contained in the policy wording.

 

Have a look through everything to see what xs direct have said previously and quote it to the FOS.

 

Even if your complaints are rejected totally, there are positives.

 

You have not had a policy cancelled and have obtained insurance elsewhere.

 

You can negotiate repayment with xs direct over a long period, even if they have not offered this yet.

[Jayden1994]

alright thanks

 

So I take it the reply from the Ombudsman regarding my initial dispute is pretty much that case done and dusted?

 

I hear what you're saying about positives its just I thought there was a way out of it but it seems there isn't anymore... Honestly shocked.

[unclebulgaria67]

Yes your complaint with the FOS in regard to insure your motor is finished, but you are entitled to reject it.

It was always going to be difficult.

 

Read back on the thread to see what Ganymede and others said.

 

The issue is that things like Private car insurance and home insurance are non advised sales.

 

They are supposed to be easy to understand products, where the insurers/brokers are not having to offer advice, but simply providing information.

 

The consumer is expected to read insurance documents and have 14 days cooling off period to reject the insurance contract.

 

I can see what FOS are saying, but Insure your motor can improve their sales process easily.

[Jayden1994]

My only option currently is to continue escalating the dispute over XS Direct and escalate it to an ombudsman...

 

I cannot afford payments at all at the moment, Won't this lead to a CCJ or debt collectors...?

 

The XS Direct letter mentioned I have 6 months to escalate this to the FOS, Does that mean I have 6 months to play with?