I know this thread is old but I thought I'd respond anyway as I take exception to what "keep it simple" was saying.

Tacit renewal has been around for years! When taking out your first policy with an insurance comapany you will be informed (by the advisor if it is over the phone or on the internet) that you agree for you insurance policy to automatically renew next year (if this is a broker they will probably also state this will be with the cheapest quote they can find).

You will be sent a renewal invite (by Budget 28 days) in advance of your policy expiring, which will state the next steps you need to take, if you've not opted out of tacit renewal this WILL TELL YOU that YOU must ring them before the renewal date to say you don't want to take up the insurance. Its not that hard!!! You do not have to send written notice of cancellation just ring them in between receiving you renewal offer and the renewal date - under FSA rules this is a minimum of 28 days.

You may complain about this practice but as long as you read your mail and the terms and conditions of what you originally signed up for you will have no problems.

A lot of people actually rely on this process to ensure that they are never uninsured.

Also there is no premium rate phone number for ringing budget - they will also call you back immeditaely if you request it while on the phone.

I too have fallen foul of this unscrupulous practice, but my situation is slightly different. Budget tried to take money from my account without my consent,or knowledge via the debit card number I gave them when I took out insurance a year earlier.

I was not told I was entering into a default indefinite insurance policy at any stage and was totally unaware that Budget were pursuing me for an unpaid premium until two months had laspsed! I recieved a renewal notice in January showing a 20-25% increase in my premium, so I shopped around and got the same cover through a different company for 33% less than the renewal. I was annoyed when Budget had tried to take money from my account around the renewal date (early Feb) and continued with my new policy which I took out a couple of days after the old policy lapsed. I would have called them if it was not for the premium rate help line number.

I regret not reading any of the letters that came from Budget, but I assumed they were spam (like all the other insurance companies that send me unsolicited mail). And in the past I have let insurances lapse like this without any comeback. My understanding was that if I didn't pay the premium, the policy would lapse. That is how it has always worked!

I am amazed that tacit renewals are lawful without a signed ageement and direct debit instruction from the customer! I think the law should be changed to prevent this underhand practice.

I did not read the small print when I got my policy (who does), but these terms and conditions are quite unreasonable anyway! I would never agree to lock myself in to one insurance company in this manner. I will now have to check everything as ine can no longer trust anybody these days!

In the event that a payment is not recieved, the insurance company should be much more proactive than sending out a few letters. After two months the letter I recieved was a threat to pay about a third of the original premium for a policy that had been cancelled after one month by Budget. They were also threatening to pass the matter to a debt recovery agency. A recorded delivery letter should have been sent after a month of me not paying and/or someone should have called me. I genuinely was unaware that I had done anything wrong until early April. They have both my numbers and an email address but have never called me on these, ever.

When I spoke to them in early April they agreed to cancel the charge if I provided evidence that I had taken out alternative insurance. I sent a recorded delivery letter and my current certificate of insurance the same day and requested that they did not instruct a debt collector. There was no repsonse other that a letter two weeks later asking me to call them as they had not been able to reach me by phone (even though I had been at home all week decorating and recieved no missed calls on my mobile) . It just said they needed to speak to me. Unfortunately the post had arrived that day as I was going out the door to visit my mother 100 miles away. When I got there I then read the letter. I called them on their premium rate number and was told that the insurance certificate didn't show a renewal date. This surprised me, but there was nothing I could do to check this or fax any more details until the weekend on my return. They agreed to wait until the following Monday, but on my return I recieved a letter from a debt collection agency dated from the previous Friday!? I have been getting harrassing phone calls from the debt collectors each day since! On the Monday they were demanding £115 from me, but after my fax reached both Budget Insurance as agreed (and a copy to the debt collection agency), the sum was reduced to £25 - NO explanation. I called Budget to see why they had reneged on their promise to wipe the charges, but they said they were still looking into it. They promised to call me back in 48 hrs, but 48 hrs has passed and I just know they will never call back.

I am writing a letter of complaint to the FSA, Budget Insurance and notifying BBC Watchdog as the debt collection agency confirmed that I was one of many people in this predicament. They said that people just do not realise that they are committed to renewal without making a written notice of cancellation 30 days before the renewal date.These insurance companies then bully people when they don't get their renewal premium.

I am guessing that the outstanding charge is for the couple of days my home was uninsured beytween the two policies. I am under no obligation to insure my home, I own it outright. I decide if I want to insure it, it is my property! I do not accept the excuse that people forget to re-insure their property and that customers would complain if they suffered a loss and found they weren't covered. I'm sure in reality, if a claim arose under such circumstances, the loss adjuster would reject the claim and say the premium hadn't been paid anyway! Renewal notices are adequate warning and the responsibilty for cover rests with the customer after the expiry of the policy - period.

In all my 47 years I have never heard of tacit renewal. It's a new one on me! I think it's an unscrupulous con trick that should be outlawed! Insurance companies are bringing their industry into disrepute with such practices - nothing justifies this practice. I have notified the ABI about my experience. I told them I don't expect them to take up my case, but as the Association of British Insurers, they should be concerned about this shabby insurance swindle giving other insurers a bad name!

I re-itterate, no company should be legally entitled to renew business without the written consent of the customer - period!

This practice just serves to criminalise honest customers!

Reservoir Cat:

well, where to start....?

Local Broker is not a trading name of BISL Ltd on FSA website!

BISL Ltd is not registered as a Data Controller with ICO!

Local Broker was a trading name of Budget Retail Ltd, which according to FSA site was not connected to BISL, and is now not authorised

A Quote is a trading name of Hero Insurance, which has no apparent connection with Budget Retail or BISL

So, even if the Data Protection Notice quoted is valid (which seems debatable), I don't think it provides implied consent to pass over data to an entirely unconnected legal entity.

. There's really little point in spelling it out to you because you still wouldn't get it lol.

well, where to start....?

Local Broker is not a trading name of BISL Ltd on FSA website!

BISL Ltd is not registered as a Data Controller with ICO!

Local Broker was a trading name of Budget Retail Ltd, which according to FSA site was not connected to BISL, and is now not authorised

A Quote is a trading name of Hero Insurance, which has no apparent connection with Budget Retail or BISL

So, even if the Data Protection Notice quoted is valid (which seems debatable), I don't think it provides implied consent to pass over data to an entirely unconnected legal entity.

RoboCop:

So maybe a lesson to learn is to use a specific card for Direct Debit transactions, and change your credit card annually !!!! :)

...or write to them at the beginning of the insurance period stating that you do not wish to include 'tacit renewal'? It's not really an opt-out scheme as it is part of their terms and conditions but I can't see any reason why your request will be denied?

Within your terms and conditions you would have been advised of the tacit renewal procedure, in addition to the 'data, including your telephone number, mobile, email will be used by BISL Limited and other carefully selected companies for administration, renewal, claims handling' etc.

To be completely honest with you, I think it's a good thing. According to their site they have over 90 different schemes. If they are acting as a broker to search around the market at renewal and offer your renewal with a different company, perhaps it's because the new company are cheaper than the previous? It's very common for people to be on the road without insurance due to simply forgetting about the renewal or the date it was supposed to be renewed. Rather than the policy lapsing leaving a percentage without cover, it's actually quite a good idea!

I can understand the frustration from some people but I really don't see the problem if you are searching around the market for cheaper prices (as most do), going with it then advising your current company that you no longer wish to contine. 'Tacit Renewal' does not mean 'Gun against head, you're staying with us' but merely 'Your policy will continue if you do not inform us otherwise'. It's not a difficult task.

If you want to spend more time writing to the FSA then that is your prerogative as a Policyholder of the insurer; but I personally wouldn't want to waste my time. That said, the FSA take the side of the Policyholder over the insurance company in most instances where the insurer has been negligent or unclear.

Either way, keep us updated and I hope you resolve it soon. Good luck :)

Thanks for the info, Cat. Coyote, I guess that although it could be that LocalBroker were allowed to provide aquote with my details, it is still unclear whether aquote could legally use the Tacit Renewal definition to 'renew' an insurance policy which they never took out in the first place. I have had some email response from aquote, and asked them this question, so will await a response.

The only saving grace is that aquote could not actually get the payment from my card as it was changed a few months ago (stolen and replaced), so at least I will not be in the position of having to chase monies from them, but they will have to do that from me if the action they took was legally viable. If it was not, then I guess that a complaint to the FSA on that basis could still be made against aquote.

So maybe a lesson to learn is to use a specific card for Direct Debit transactions, and change your credit card annually !!!! :)

Will keep you posted.

I don't see how making a complaint will help. The Local Broker website clearly states the following:

Data Protection

By supplying data to us you will provide information about yourself and others which the Data Protection Act defines as personal data or sensitive personal data. The data controller will be BISL Limited.

Data, including your telephone number, mobile, email will be used by BISL Limited and other carefully selected companies for administration, renewal, claims handling, credit checking, marketing and research purposes and will be added to certain databases which may be checked by various organisations including the police.

By supplying data you give explicit consent for all the data provided to be used in this way unless you tell us otherwise.

For mutual security calls are recorded and may be monitored for training purposes.

This will also be given in writing to the Insured Policyholder. If the Insured has not read this, then this is down to them. If the Insured was not given this in a 'durable medium' then this can be challenged but I guarantee this will have been in the T&C's.

no, this is not permitted - you would have to agree to it in advance

furthermore, as these appear to be separate companies, there could well be a breach of data protection law - as one company cannot pass your information to another one without your prior consent

from what I have ascertained from the FSA site, Local Broker was one of several trading names of the FSA authorised firm called Budget Retail Ltd, located in Peterborough at the same address as Budget Insurance Services ltd (BISL). I assume there is a connection with BISL. Budget Retail are no longer authorised by FSA to do business, so would not have been able to handle your renewal. It appears they have handed their business on, but you should have been informed about this in advance, if so.

You can contact Budget Retail to get an explanation or complain etc on 01733-845405 or email julie.raistrick AT budgetinsurance.com

again, according to FSA website, A Quote is a trading name of Hero Insurance Services Ltd, which is an authorised firm with FSA

hope this helps...let me know what transpires!

Guys, from this thread it seems that tacit renewal is legally ok for an insurance company to do, however I was insured through 'LocalBroker' with an AXA policy last year, and this year someone called aquote has approached me with the tacit renewal trick - um, policy. Does 'tacit renewal' apply for a different company to renew the policy?

I spent a year covered by Budget (I renewed to a proper insurer last month) - I certainly regretted choosing Budget last year - I never felt secure with them - luckily, I never had an accident - but in general communications - they were extremely lacking - I made sure that I wrote to them (snail mail) to cancel their "automatic policy renewal" procedure.

Anyway - their renewal was higher than I found with my present "proper" insurance company

I hope for your sake you never have a claim. I have had two accidents recently, both not my fault, but Budget has done all they can to be rude and unhelpful. Sadly I was even caught in their renewal scam so I am still stuck with them, but am trying to get away as soon as I possible can.

Be warned about Budget - they may be cheap, but the low price is certainly not worth the hassle.

I agree with Reservoir Cat here, Budget will fully refund with evidence of another insurance policy.

Tacit renewals are a very important part of motor insurance especially. I have dealt with many cases where people forget about renewing their insurance policy. With good reason there is 'no grace period' for motor insurance as there may be with some property or commercial insurances, and it is a legal requirement to have it. The only way to ensure cover is effective without payment is by a 'Promise to Pay'. Tacit renewals are certainly not 'buried in small print' as your renewal invitation will clearly point out that the policy will be automatically renewed unless otherwise instructed.

I understand that CharteredAccountant hung up in frustration, and that no-body deserves to be spoken to rudely, but hanging up without giving a clear indication that you do not wish to proceed with the renewal is probably a slight lapse in common sense by the OP. The fact of the matter is that the OP called Budget, for some reason was peeved, then hung up. Budget will need clear indication that you do not wish to proceed otherwise they would be held liable if it were lapsed and the person left without policy cover; precisely why tacit renewals were made common throughout the industry.

On a positive note, CharteredAccountant has highlighted a good point that Budget provide Budget prices for a reason. You pay for service accordingly.

I think you guys are getting a bit carried away...it's not that complicated. Budget should send the renewal invitation approx 14-21 days before renewal, giving notice of when renewal is due and what will happen. The letter should explain that the renewal will proceed automatically unless you decide you don't want it and notify them accordingly before renewal date. If no such letter was received, then Budget don't have a leg to stand on. If it was received (and it sounds like it was), then the question is - were they actually instructed to cancel the policy at renewal?

On a technical point, the practice of 'tacit' renewal is perfectly legal, provided there is the opportunity to opt out. Unfair terms are generally those where you have no option but to accept them i.e. they are non-negotiable. Anyhow, strictly speaking the relationship with the broker (as opposed to the insurer) is not a contract as such. Budget is a broker.

Despite all the above, I reckon Budget will fully refund if there is proof that the renewal was not required (e.g. evidence that the car was insured somewhere else from renewal date). It's not the kind of complaint that they would want to be put in front of the Financial Ombudsman.

Hi -- Inform Budget that unless they make a full and speedy refund of all the money they have taken, that you will make a complaint to the OFT about their breach of The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs).

http://www.oft.gov.uk/advice_and_resources/resource_base/legal/unfair-terms/

A term is unfair if:

contrary to the requirement of good faith it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers.

'Good faith' means that you must deal fairly and openly with consumers. Standard terms may be drafted to protect commercial needs but must also take account of the interests and rights of consumers by going no further than is necessary to protect those legitimate commercial interests.

The Plain Language Requirement.

According to the UTCCRs, a standard term must be expressed in plain and intelligible language. A term is open to challenge if it could put the consumer at a disadvantage because he or she is not clear about its meaning - even if its meaning could be worked out by a lawyer. If there is doubt as to what a term means, the meaning most favourable to the consumer will apply.

This business practice, of burying "tacit renewal" disclosure in the depths of the print which is too small and too feint to read, may be strictly legal.

Any conpany that actively seeks to cheat its former customers in this way would appear to be morally bankrupt.

What did Gordon Brown actually mean when he talked earlier today of "cleaning up" City practices?

Well here is one sharp practice that could very easily be targetted for the benefit of consumers and honest brokers alike.