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Cooling off Period

Last post Thu, May 01 2008, 12:22 AM by Vicissitude. 26 replies.
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  •  Thu, May 01 2008, 12:22 AM

    Re: Cooling off Period

    I quite agree. The FSA rules are more like guidelines in some areas but with the TCF being fully enforced by the close of 2008, the fees should become all the more clearer. I worked for a company that were charging anything upto 10% of the premium. You can see the massive fees here! They quickly standardised fees to not exceed the £35 as per their terms and conditions. I do think this is a fairly reasonable fee, although it could be argued otherwise. It's certainly the 'norm' if we compare the fees of most insurance companies. The bottom line is, if you are entering a contract, note the period of the contract. If you are not willing to fulfil the contract, opt for a shorter one or not at all. £10-20 is not a deterrent, £30-£35 is.

    Ref:

    It seems this is allowed because it puts people off of buying a policy then cancelling after the documents come through so they have a certificate to wave around if they get pulled over. It also deters people from buying a policy just to drive for a few days then cancelling when they should just ask for short term cover. !

    Absolutely. Although those cancelling after receiving the Certificate to show the police will be wasting their time. If the database indicates that there is no cover in force, the police are now calling the MIB directly. In turn, the MIB call through to the insurer/intermediary on the Certificate and confirming whether or not the policy is in force and to update the MID accordingly. A new initiative is being rolled out to further prevent those driving without insurance. This will be revealed in due course, and I estimate around October time. From what I understand, the new system will well and truely make those uninsured think twice!!!

    Back to the fees. For the aquisition of new business it will cost the average intermediary and insurer approximately £36-£42 PER CUSTOMER depending on size of the company, the advertising involved and the buying of leads from the comparison site etc. This is without administration throughout. This is one of the factors which highlight the importance of renewal retention to insurers. It's free business.

    By the end of this year, quite a few changes will be implemented which will make things clearer to customers, and which will either make or break some of the companies mediating in insurance currently. Watch this space....!

    • Post Points: 20
  •  Wed, Apr 30 2008, 11:03 PM

    Re: Cooling off Period

    Yes Vic ...the whole situation surrounding refunds within the 14 day cool off period is "Grey" and unclear, what is clear is they are entitled to charge a "reasonable" fee to cover admin costs only and time on risk, but in lots of cases if you argue the point they will waive this fee altogether rather than risk getting embroiled in a situation they cannot immediately clarify at the point of cancellation.

    What I can decipher from the FSA ICOB 6.2.2 refunds bit, is although a 14 day cooling off period was statutory, insurers have a right to charge a reasonable admin fee if you cancel your policy in this 14 day period, although there was no specific "reasonable" admin fee mentioned (which in fairness I think should be). I agree a reasonable cover fee should be allowed but it seems some insurers are trying to profiteer at the expense of certain people's ignorance of the complicated and uncertain fees mentioned under different "unreasonable" cancellation terms they include.

    It seems this is allowed because it puts people off of buying a policy then cancelling after the documents come through so they have a certificate to wave around if they get pulled over. It also deters people from buying a policy just to drive for a few days then cancelling when they should just ask for short term cover. !

    • Post Points: 20
  •  Wed, Apr 30 2008, 10:01 PM

    Re: Cooling off Period

    An insurer may charge you upto the usual £35 cancellation fee and the time on cover even within the 14 days. Some also clearly stipulate that you will be charged 'loss of agent's commission' in their terms and conditions.

    The cooling off period is designed for you to read over the terms and conditions of the policy which should be given to you either on the telephone or "in good time" (according to FSA regulations). If you decide to cancel the policy through no fault of the insurer then you will still be charged the cancellation fee. If you can prove a fault with the policy you were sold, then the fee is not chargeable. (ie. misrepresentation, terms cannot be complied with, excesses not given at the time of inception).

    A lot of people think the 14 day cooling off period allows them to receive all monies back minus the time on cover. In TommyCee's case, this would mean only paying £4.38 when, clearly, this isn't covering any losses that may be incurred for the set-up of the policy. Believe me, it does cost a lot more than £4.38 to incept a policy with an insurer especially where cancellations occur shortly after. If the 14 day cooling off period worked in the way that a lot of people think, consumers could enter a contract, and cancel a contract without any financial repercussions. Do you enter into a mortgage contact and cancel without any financial deductions? Do you enter a hire purchase agreement and end the agreement early without any deductions?

    • Post Points: 20
  •  Wed, Apr 30 2008, 3:18 PM

    Re: Cooling off Period

    Hi

    I have been through this twice with Sureterm.

    Tell Swinton you are making a formal complaint to FSA.If they don't back down fill in the complaint form on line at FSA website.

    Sureterm capitulated when I did this.

    This is just a con by insurance companies to make even more money.

    Any charge has to be "fair and reasonable" £10 is £65 is not.

    • Post Points: 20
  •  Wed, Apr 30 2008, 2:24 PM

    Re: Cooling off Period

    Hi Tommycee --- In your case refer Swinton to their own terms below which state that there will only be a £35 cancellation fee + the 10 days time on cover.

    They are pushing the regulations on that as there are supposed to be no cancellation {except reasopnable admin fee ?) within the cooling off period, only for the days on cover. You could tell the Head office that you will lodge a complaint with the FOS (which costs them) if they do not waive the cancellation fee altogether.

    ................. ....................

    http://www.swinton.co.uk/terms/

    Your right to cancel your insurance.

    You have a right to cancel any insurance you buy through us and to recover any payment made (except as stated below). You can do this by giving notice to your branch (whose address is shown on the covering letter) within 14 days of your receipt of the policy document.

    If you do exercise this right to cancel your insurance, you will be charged by the insurer for the service provided up to the point of cancellation. We will also make a cancellation charge of £35 except as shown in the service charges table overleaf. You will not be entitled to a refund of the service charge or credit card handling charge made by us for arranging your insurance.

    • Post Points: 5
  •  Wed, Apr 30 2008, 12:46 PM

    Re: Cooling off Period

    Hi everyone,

    I thought i'd add to this thread with my own story,

    I recently canceled my insurance policy with Swinton after about 10 days, as my daughter has just passed her test and was quoted a silly figure of about £2,000 to cover her under my name.

    My policy cost me about £160 for the year, i rang up the company to cancel it and told i would be refunded if i returned my certificate of insurance, I returned it in person with a written notice saying i wanted it to be canceled.

    Today I have received a letter informing me that about £60 will be credited to my account, which means i have been charged £100 for ten days of insurance! I have called the local branch and i have been told to make complains to the head office...I have called head office and they have offered me an additional £35 refund, this means i am still paying £65 for the cancellation, can anyone advise me on what to do next?

    Thanks

    • Post Points: 35
  •  Fri, Apr 04 2008, 9:47 PM

    Re: Cooling off Period

    Sorry to piggyback on to this topic/ thread, but it so exactly resembles the problem I am about to have.

    Yesterday, I thought it would be a good idea to use Moneysupermarket.com to see if I could beat my Norwich Union motor quote. Sure enough, I was delighted, being offered quotes at 50% of NU's. Not long after this, I received a phone call, from a lady who obviously had access to what I had entered on this site. That surprised me, but it figured - possibly, though I wasn't sure how. This lady arranged immediate contact with two brokers (why - what is MSmkt.com about then?). The first couldn't match the quote. The second, however, managed to beat it by a small amount. There were also some additional options offered in the quote that also persuaded me. I did say that I may be selling my car in the near future - if I can get a good price. However, I accepted the quote over the phone, but before doing so, I was read out the basic conditions of the policy etc. At the beginning of the 'speil', it was stated that there may be additional charges. I remembered that until the end, when I asked about what it meant. An example was given of changing my car, though when asked for an amount it was skirted round. I asked about cancellation, whereupon I was told that it was 'typical' for insurers to take 30% of the annual premium, plus insured time used. No further detail of any charges was given.

    Over night, I mulled this over and decided that since a friend of my wife was interested in the car, I was not happy about the 30% penalty - which I've never heard of before. I've also never been charged a fee for changing the insured vehicle. I decided I would use the 14 day cooling off period to cancel the policy before it had begun. It should begin on 25th of this month. I was told that there would a £25 administration charge for this - EVEN THOUGH THE POLICY HADN'T STARTED!! Apparenly, according to the brokers, Academy Insurance Services, this was a charge rendered by the insurance company. As soon as I sounded in any way cross about this, I was threatened with them putting the phone down on me. (I was also called 'Sir' at least twice in every sentence - which always alerts me.) That was their way of easy exit. I have contacted several insurance companies directly to check this out. They all EMPHATICALLY stated that if the policy hadn't started, there would be no fee. How could there be, the policy wasn't in force?

    I do not have a policy or quote reference number, I have not even been given an address of the broker, though they say everything has been posted first class. (I'm not disputing that, yet.) They also, cheekily in my view, have taken the first installment for the policy from my card - two weeks before the policy is due to start and before I have signed any agreement.

    Firstly, 'Dear Moneysupermarket.com' - as the lead to this broker originated from your site, are you easy with the treatment I've received and what I will undoubtedly now receive? It reflects badly on the site and your good name. I can't help but think of what Martin Lewis, of Moneysavingexpert.com might say of this. (I smile as I imagine it!) I personally believe that you are definitely NOT happy to read of who you are handing out leads to.

    Secondly, I would be very grateful of any knowledgeable advice. I have ideas, and of course there is the Insurance Ombudsman, who I will definitely be contacting if I don't get all of my money back.

    Do you want my advice on motor quotes? Stick to the web results returned, then speak to the sales lines and ask your questions. I have always found them to be very helpful, straight forward and honest. I was about to do this ..... when the phone rang .... and here I am. It's ruined my day. I hate to feel cheated.

    Moderator - Your comments have been passed over to the relevant department for their inspection and investigation,

    Thanking you.

    • Post Points: 20
  •  Wed, Mar 26 2008, 5:19 PM

    Re: Sureterms Fees

    At last after over 2 weeks Sureterm have agreed to refund all the £50 (plus £1.94 to cover the costs I incurred in receiving a letter from the, recorded delivery but no stamps!!) They offered a £20 refund which we rejected. I wrote to the Ombudsman and told Sureterm that I had, quoting the reference number the Ombudsman had supplied,then they capitulated. It has been a lot of work but has been worth it.I hope this helps others in the same boat.Sureterm are the losers as when our motor home is due for renewal with them we will go elsewhere for cover.THE END!

    Must admit I am puzzled as to why you didn't simply end all dealings with them at the time, when you struggled to get your result above. ??

    You are better off without them, it's their loss and you're gain.....Live & learn. !!

    • Post Points: 5
  •  Wed, Mar 26 2008, 5:04 PM

    Re: Sureterms Fees

    Just when I thought it was all over its erupted again.A dispute with Sureterm Direct that is.We have just changed our Motorhome which they have insured for us. As well as an expected additional premium to reflect the higher value etc of the new Motorhome, guess what-they have charged an admin fee of £50!

    A very strongly worded email to their complaints dept, resulted in a very curt phone call from them saying they will refund all the charges they have made BUT they are cancelling the policy in 7 days time as they no longer want to our business.Good PR eh. Be warned if you f*art they want £50 for the paperwork.I strongly suggest you don't use Sureterm.direct if you intend to change or alter anything on your policy, cause it will cost you fifty quid a time.Goodbye Sureterm-hello someone who actually values goodwill and PR (probably Adrian Flux)

    • Post Points: 20
  •  Thu, Dec 13 2007, 4:11 PM

    Re: Cooling off Period

    Hmmmm --- Food for thought, at least it would have them worrying and wasting their time getting their legal departments views on the matter with all the associated admin and paperwork it brings. !      

    : - ) .......  That would be a taste of their own medicine.
    • Post Points: 5
  •  Thu, Dec 13 2007, 4:04 PM

    Re: Cooling off Period

    I did think about invoicing them for my time (I am self employed) at £50 per hour.I have spent several hours on this matter just get get my own money back!
    • Post Points: 20
  •  Thu, Dec 13 2007, 3:31 PM

    Re: Cooling off Period

    Thanks for the update.... as said they do try it on by making it that awkward and troublesome in the hope that people just back down and give up, which works to their advantage in most cases.

    In my view, firms that try this should face an automatic fixed compensation amount awarded to the customer, along with a fine, that would guarantee they refunded people's money without trying this on. !!

    Glad you stuck it out as a matter of principle, the money is yours and belongs in your pocket. !!

    • Post Points: 20
  •  Thu, Dec 13 2007, 3:23 PM

    Re: Cooling off Period

    At last after over 2 weeks Sureterm have agreed to refund all the £50 (plus £1.94 to cover the costs I incurred in receiving  a letter from the, recorded delivery but no stamps!!) They offered a £20 refund which we rejected. I wrote to the Ombudsman and told Sureterm that I had, quoting  the reference number the Ombudsman had supplied,then they capitulated. It has been a lot of work but has been worth it.I hope this helps others in the same boat.Sureterm are the losers as when our motor home is due for renewal with them we will go elsewhere for cover.THE END!
    • Post Points: 35
  •  Tue, Dec 04 2007, 2:28 PM

    Re: Cooling off Period

    The form has been downloaded and filled in. It will be posted today.I also emailed several of the magazine editors, where  they advertise, one has already replied and is printing my ltter and wants to know the result. I am NOT giving up, this is highway robbery 2007 style.
    • Post Points: 5
  •  Tue, Dec 04 2007, 2:16 PM

    Re: Cooling off Period

    Hi --- That appears like the real runaround I don't understand that letter it sounds contradictory, "it's a fob off", you are entitled to a cooling off when buying car insurance and they are simply hoping that you will give up.

    Make that complaint as you rightly intend to as a matter of principle, it may take longer but you will get the refund once the FOS are involved, I enclose the FOS site to whom your complaint should be made to...... Keep us updated on the progress.

    http://www.financial-ombudsman.org.uk/

    • Post Points: 35
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