XS Direct 3k Total Excess - Worried regarding Debt Collectors

[Jayden1994]

Hey HB

 

Oh right okay, Will check that out.

 

Regardless of my current position/ situation I've learnt a lot of invaluable information from this site that I can actually use day to day. Always willing to learn a bit more if it can help myself or others who might run into the same scenario in the future that I might speak with.

 

Regards

[Jayden1994]

Hi all

 

Just spoke with a FOS Investigator, She is going to send me over the paperwork to complete to file this complaint and there I will outline everything to her from start to finish. If I'm honest it does not sound promising for myself but I will hope for the best.

 

If I recall she stated consumer credit was irrelevant as I was paying my premium on a monthly basis and not a lump sign so no agreement was signed or along them lines... Was pretty advanced information for someone with my experience on the matter.

 

I will let you know of the outcomes

 

Thanks again

 

Kind Regards

[unclebulgaria67]

But as soon as you have an accident with a debt obligation of up to £3k, they are inviting you by contract to become involved in paying them back the relevant sum. Given most people don't have £3k in savings, then an arrangement would have to made, but no details are given upfront. It would not be exact, but it might be them saying that they would allow x no. of months to pay, no interest would be charged etc.

 

And they offered no alternative. If the premium was only £50 more expensive per year not to have this £3k excess applied to third party claims, then surely that was something reasonable to offer an an alternative. If they said that by having a fault accident, you would have a debt owed to XS Direct of up to £3k or if you paid £50 extra premium, they could offer a policy with no third party claim excess.

 

Make the argument and see what happens.

[Jayden1994]

Of Course

 

Thank you

[Mwynci]

But as soon as you have an accident with a debt obligation of up to £3k, they are inviting you by contract to become involved in paying them back the relevant sum. Given most people don't have £3k in savings, then an arrangement would have to made, but no details are given upfront. It would not be exact, but it might be them saying that they would allow x no. of months to pay, no interest would be charged etc.

 

And they offered no alternative. If the premium was only £50 more expensive per year not to have this £3k excess applied to third party claims, then surely that was something reasonable to offer an an alternative. If they said that by having a fault accident, you would have a debt owed to XS Direct of up to £3k or if you paid £50 extra premium, they could offer a policy with no third party claim excess.

 

Make the argument and see what happens.

 

 

 

I agree with this line, the policy provides no option other than to be in debt, this is different to an own damage excess where ultimately if you don't want to pay it, you don't make the claim.

 

For a business to place someone in this position without looking at the individuals risk acceptance criteria seems reckless to me, if say they took a guarantors details, checked you have the funds (which is how commercial policies work if there is a TP excess and satisfy the RTA obligation) , scored you on your perception to risk then that would be different. Anyone who deals in loans/pensions/finance will have a better understanding of this risk than me.

 

The question is then should a reckless organisation be allowed to place you in that position of risk over (as mentioned already) what could be a trivial amount of policy increase.

 

The black and white of this is on the face of it the insurance company have done this by the book, you need to point out that by the book isn't enough to protect a consumer.

[Jayden1994]

This is all for a claim being made against me, Not a claim raised from myself.

 

Thanks for the info though I will incorporate all of this in my complaint to the FOS. Not sure what evidence I can attach as there isn't really none when disputing this type of thing.

 

Kind Regards

[unclebulgaria67]

Think you might be misunderstanding this and you need to be clear.

 

You are legally required to have third party insurance by law under Road Traffic Acts. Your Insurance is noted on Motor Insurance Database. What your policy says on third party liability, is that XS Direct will deal with third party claims on your behalf. But there is an excess of £3k and in the event of a claim, XS Direct will settle the third parties claim in full, but you would have to refund XS Direct up to £3k. They are NOT leaving you to deal with third party claims directly, as i then doubt the Insurance woulld comply with Insurers legal requirement on third party liability cover.

 

If you look at what you were told on the phone when arranging the policy, they are making a big assumption that you have £3k savings to pay XS if you had a fault accident. Yet they never really explained the claims process and how you pay XS the £3k back, if you did not have the money. They are telling you by buying this policy, that you could owe XS Direct a debt of up to £3k and not telling you the terms. This cannof be right and must be an unfair contract. This unfairness is made worse by no alternative being offered.

 

With a normal insurance policy you have an excess on damage to your own car and if you did not have the excess money, you would have to save up, before getting the car repaired.

 

You don't need any evidence, other than the policy you were sold and the information on the sales process e.g call recording. It is then trying to persuade FOS that the contract is unfair.

[Jayden1994]

Right Okay, That makes more sense now. Thank you. Today or tomorrow I will write my letter up within the complaint and send it off mentioning the above as my main argument in addition to a couple other pieces of information you provided me with.

 

Kind Regards

[honeybee13]

Jayden, if you wanted the guys to cast an eye over your letter, I hope they'd be happy to have a look.

 

I shouldn't speak for them, but it's an important letter.

[Jayden1994]

Yea that would be greatly appreciated, I will attach it here for all to take a look at if they have the time and to let me know of any edits I should make. A template would help due to my inexperience on these matters but regardless I will still attempt to write up the best letter I can addressing the above.

 

As the FOS investigator sent me a complaints form to fill out I told her I would write my full complaint/ reasoning on a seperate word document instead of using the small box they offer on the form and she was fine with it.

 

Regards

[unclebulgaria67]

When you start to put the FOS info together, i would suggest you look at ICOBS 5 & 6 in this link, plus also look at distance selling rules, as you bought the policy by phone.

 

https://www.handbook.fca.org.uk/handbook/ICOBS

 

5 is about identifying your needs i.e is the policy suitable. Unless you have significant savings in the Bank, having a policy with a debt obligation of up to £3k, is unlikely to be suitable. What happens if a Policyholder has 2 fault accidents within a short space of time ? Both claims mean a debt owed to XS Direct of over £5k bringing them above the threshold for Bankruptcy. No sufficient warning is offered about the potential debt consequences of taking out such a policy.

 

This is not a standard Car Insurance that was offered, as normally the Insurers fully cover liability to third parties with no excess. In the event of fault accidents, the financial consequence could be ruinous to many people. Yet no details are provided about how XS Direct would handle any debt owed to them and Insure your motor who sold the policy did not offer any alternative product that did not contain such a potentially financially damaging unusual feature.

 

You are going to sit down and start putting your thoughts together looking at the information you have. It is important you understand it.

[Surfer01]

Is the damage to the other vehicle £3k or more? If the damage less than £3k, consider getting a loan/overdraft to pay for the damage without involving the insurance company. At least with a loan you may be able to spread out the repayments over 3 - 5 years.

[Jayden1994]

Its more, So they will be asking for the full 3k @Surfer01

 

If I'm honest I am really worried about writing a letter up of such importance at this crucial stage as I don't think I will word it correctly nor articulate the key points of my argument that could potentially be valid in the right way...

 

If you don't mind me asking if anyone would be willing to write said letter for me I would be willing to pay them for this, I just do not want to rush it nor create a sub-par document to send to the FOS investigator. If not I will sit down and do it myself to the best of my ability, No worries just a suggestion to ensure the best document I can.

 

Kind Regards

 

J

[unclebulgaria67]

Jayden, you need to own this for your own good. Your comments to this thread evidence that you write very well and can easily write a letter. It will help you, as you may need to do this in future.

 

I have already written quite lengthy posts covering various points. I am sure you could copy and paste some parts of comments into a letter. I would not start writting letters for people on an internet forum such as this and payment would not be allowed anyway.

 

I am sure Surfer was trying to be helpful, but you can't take over a claim for Insurers and start taking on greater liability, taking out loans etc. What would be the point of insurance. Bad enough having taken out a £3k all sections excess policy.

 

Start to put something together and post it here for comment.

[Surfer01]

Okay however I still think that if you have to pay the £3k, then get a loan somewhere as that may be a lot cheaper than paying their rates if they allow you to pay off the £3k over time. Their rates may be in the vicinity of 28%APR whereas a loan would be a lot lower. Are you also claiming for the damage to your vehicle? Don't worry about debt collectors as you are a long way from that stage.

[unclebulgaria67]

So Surfer, do you know that XS Direct charge interest on a repayment arrangement ?

 

This info is not known and if you have this info it would be a major part of this FOS complaint.

[Surfer01]

I did use the word "may" as I do not know.

 

It seems common that when there is a payment scheme with an insurance company the APR is close to 28%.

Either way the OP has to pay the £3K and a loan may be cheaper.

 

There is also a possibility that the OP could then be locked into the insurance company at renewal time as they are paying off the £3K. Rather safe than sorry.

 

The OP if they are going to have a repayment scheme with the insurance company need to establish the APR, the term and whether they would be locked in at renewal time.

[Jayden1994]

My renewal is available end of this month but the my policy is finished end of June.

 

At this point in time I would be unable to get any loan for less APR than 28% anyways due to other financial responsibilities I have at the moment (Currently repaying a loan etc).

 

You state one way or another I will have to repay it, What if the FOS deem my argument valid? Not the most encouraging thing to hear.

[unclebulgaria67]

I did use the word "may" as I do not know. It seems common that when there is a payment scheme with an insurance company the APR is close to 28%. Either way the OP has to pay the £3K and a loan may be cheaper. There is also a possibility that the OP could then be locked into the insurance company at renewal time as they are paying off the £3K. Rather safe than sorry. The OP if they are going to have a repayment scheme with the insurance company need to establish the APR, the term and whether they would be locked in at renewal time.

 

We should stick to what is definite. Yes Insurers charge for monthly instalments relating to premium payment, but that information is given upfront. This thread is about a third party liability excess of £3k that XS Direct expect as a lump sum immediately with no repayment plan.

 

The FOS complaint needs to be addressed first and if the FOS don't uphold it, then that is when options about repayment would have to be looked at

[Jayden1994]

shall I ring my claims handler or ring XS Direct maybe to talk to their finance department to inquire if interest is charged, As you said It would be a strong argument to the FOS if it is?

[unclebulgaria67]

My renewal is available end of this month but the my policy is finished end of June.

 

At this point in time I would be unable to get any loan for less APR than 28% anyways due to other financial responsibilities I have at the moment (Currently repaying a loan etc).

 

You state one way or another I will have to repay it, What if the FOS deem my argument valid? Not the most encouraging thing to hear.

 

Don't worry about this. Get your FOS complaint written using info you already have.

 

Surfer cannot be right that XS Direct can start loaning the XS money at interest, because as far as i know this was never part of the Insurance contract.

 

The whole point of the FOS complaint is that Policyholders are being placed into a debt obligation they might not be able to service, just by having an accident. Yet neither Insure your motor or XS Direct looked into your finances.

[Jayden1994]

Ok will do

 

Thank you once again for everything

[dacouc]

So Surfer, do you know that XS Direct charge interest on a repayment arrangement ?

 

This info is not known and if you have this info it would be a major part of this FOS complaint.

 

Page 20

 

https://www.onecalldirect.co.uk/existingCustomers/website-documents/getDocument.php?doc_name=1488541941Motor-XSD-Insurance-Policy-Wording.pdf

[Jayden1994]

says "Failed to load PDF" when I click on it.

 

My insurers are XS Direct not onecalldirect.

[unclebulgaria67]

Page 20

 

https://www.onecalldirect.co.uk/existingCustomers/website-documents/getDocument.php?doc_name=1488541941Motor-XSD-Insurance-Policy-Wording.pdf

 

I can't open that PDF.

 

Can you copy/paste please