My parents are having problems with their ex-insurers.

They took out a policy last year, paid in full with debit/credit card (don't know which). This year, no reminder/renewal arrived, but they suddenly got letter threatening collection agencies for an amount owing of £112.78 - mother rang to query this and was told it was charges because they (Budget) had cancelled her insurance for non payment after they used card details they had kept for a year in order to renew the policy.

She's really worried because (a) she's been driving without insurance, (b) they can't afford it and (c) they are getting nasty letters about it.

What can we do? She got NO renewal, NO notification from the bank that they'd bounced a payment, NO letter to say her insurance was even cancelled.

The policy (when she rang to sort this) had also gone up to £241 from £184 when there have been no claims or anything, and if they go on the website the quote is £185! They have said they will reduce the £112 to £51 if they re-insure with them! Dad told them to take a hike...

Suggestions as to what they can do? I've written a complaint letter for mother to sign and send but what if we have no joy? Or has anyone else had this and knows a good way to get them to cancel this money outstanding?

First job is to arrange insurance (with someone else?). You can check to see if you are covered or not at www.askmid.com . If you use someone else, you should dispute any charges that Budget want paying. If they have taken payments, you should try to reverse them through your bank.

I had similar problems with Hastings Direct a couple of years ago but I'm with Budget now. I did ask them not to renew without my specific instructions but I expect that they'll try something similar with me in a couple of months at renewal time so I'm going to put my wishes in a letter just so that it is in writing. It's becoming normal practice for some insurers to behave like this.

They have insured with someone else so are legal again, luckily this happened while they were on holiday so not driving. First thing they did when they saw the letters was ring to sort out insurance, Budgets as I say was silly money plus £112 so they've gone with someone else and are now just battling to get this £112 wiped. Send a letter yesterday to Customer Relations as a first step before we tackle the ombudsman if no joy.

I just think - as I've pointed out to them in the letter - its very bad practice to keep credit/debit card numbers on file for a year given the amount of fraud, cloning, lost cards, changing providers and just plain cards expiring - will lead to problems. Plus with all the safety scares of companies being hacked and data stolen and even left on memory sticks/laptops that have been lost/stolen - its a stupid risk to take.

Very bad practice and in not even contacting my parents by letter, phone or email, its appalling. I honestly think its a deliberate money making scam hoping people will forget and just let the hiked charges go through unchallenged. Which is what I'll point out if they don't give in and waive the charges.

I find it incredibly hard to believe that the insurance company failed to send letters/notifications. They would have sent c.4-5 letters taking into account the information you have provided. It also worries me that even the banks letter didn't get there.

Budget are a crap company but I'm pretty sure they wouldn't just not bother to send anything.

RE card numbers. They are encrypted and you'd need to have a PHD in 'Asterix Reading' ************.

Perhaps you should check with Royal Mail to see why your post, from separate organisations, is not arriving.

Coyote:

I find it incredibly hard to believe that the insurance company failed to send letters/notifications. They would have sent c.4-5 letters taking into account the information you have provided.

When I didn't get the letters from Hastings that I mentioned above, I made the same point that it would have been unusual for one letter to go missing but next to impossible for 2 or more. Their response was that they sent the renewal quote and the insurance certificate together in one envelope!!! I threatened to bounce the card payment before they agreed to charge me pro rata for the insurance "used" and I accepted that.

Before looking to the ombudsman, you could contact your bank and ask them to reverse an unauthorised payment. If you act without agreement though, it is possible that you could lose your NCB unless you already have NCB proof.

The bank will not inform you if a debit card payment is declined. Only the company trying to debit will do that. Otherwise, every time your debit card is declined in a shop, the bank would be writing to you about it. It is only direct debits and standing orders returned that you are informed about.

They cannot just take the renewal fee without prior notification. This is definitely not allowed.

Margaret-Rose:

They cannot just take the renewal fee without prior notification. This is definitely not allowed.

Driving at 71mph is definitely not allowed as well, but it happens.

They are taking the sap.

You need to call them and initiate a formal complaint. This doesn't have to be in writing you can do it verbally over the phone, although I would suggest you do write or email so there is a written record you can produce to the watchdog later on. Also record all times, dates and who you spoke to, (these calls should be recorded by them, and you can request them under the Data Protection Act if necessary).

There are certain set rules to follow as per FSA guidelines for handling complaints. They will need to provide you with a copy of their complaints procedure, (so do ask for one) which will be along the following lines - In the first instance they can give you a verbal response within 1 working day of your complaint. If you are not satisfied, you then have to write in anyway, with details of your complaint, and they then have 4 weeks to reply in writing. If not satisifed, you can take it further when they will have another 4 weeks to review it, usually at a higher level within the organisation. At this point, this is usually the end of their complaints process where you would then escalate it to the watchdog.

In your case, I doubt very much whether it would get that far. Most brokers I know, (and I know a few from working in the industry), would simply NTU (not taken up) the policy at no charge and avoid the hassle, so if you create enough trouble they may just waive the whole thing.

Lastly, it's definitely not correct procedure to incept a policy without payment, so if you card was rejected. After the payment was rejected, they should have contacted you about renewal first, before initiating the cover.

The point is that it is entirely legal and not an unauthorised payment as you authorised it when you incepted the cover.

Read your T & C's and you will find something similar to:

Any credit/debit card details, if submitted, will be held on file and we reserve the right to collect payment of premium in certain circumstances – i.e. adjustments to policies, defaulted payments and balances owing following cancellation.

Premiums we collect from you are held in an insurance broking bank account used for the purpose of holding client premiums. By virtue of agreements we hold with insurer, those premiums are treated as having been paid to the insurer. We will remit the premiums to insurers, after deduction of our commission, in accordance with the terms of our agreements with insurers.

In the event that you have to change insurer mid-term and you new policy in placed back with us any debt that exists on a new policy may be added to your new contract this could include being added to your direct debit instalment facility in order to spread the cost.

Tacit renewal

Policies held through us that are paid by direct debit through <CREDIT FACILITY> will be automatically renewed. Your payments will continue to be taken from your account unless you contact us prior to the renewal date. We will send your renewal notice in good time before the renewal of your policy to provide you with details of your premium and cover that is being offered. If you do not want your policy renewed you must contact us prior to the renewal date. If you fail to contact us prior to the renewal date you will be charged for the service provided by the insurer plus a < £ FEE> administration fee from ourselves for renewing your policy - subject to no claim being made against the policy.

Just because it says this in a policy's terms and conditions doesn't mean they aren't taking the p**s. Look at the banks and credit card companies, it seems their terms and conditions were unfair and unjustifyable...

I'm sure they get many people ringing about the same thing, and just because they claim they posted 1 renewal letter, doesn't mean they actually did. It is also reasonable to assume that out of all the renewals posted, some of them will not arrive. How often do you receive other people's post? Happens to me all the time. From my experience, we were always told to follow up renewal letters, so there could be no doubt about whether we were compliant or not, and if necessary, we could show we had made very effort to contact a client before renewal, I suspect this is not the case with Budget, after all, you seem to be getting post fine now. Also, tacit approval does not take into account people going on holiday, being imprisoned, emigrating, etc. There are all sorts of situations where this is not appropriate.

Besides which, charging half the total premium for what has probably been only a couple of weeks is unreasonable. I would expect that the premium already includes a renewal fee, and I doubt the return is quite so low. I would ask them to give you a breakdown of the renewal price and the cancellation price, so you can clearly see what fees are being charged and by whom.

At the end of the day, "Treating Customers Fairly", is a big thing with to the FSA, and Budget are obviously not complying with this, so I still think you have an excellent case for a complaint.

I didn't say they weren't taking the p iss I just said that it's not an illegal practice. As you are 'in the job' you will know that the TCF you quoted are merely guidelines currently as the FSA have extended timeframes.... not that it has any relevance to this case. Budget, as crap as they are, have done nothing here to warrant any TCF issues and it's comments like that which are going to increase premiums across the board ! You're quoting banks and credit card companies. Why? Insurance is an entirely different industry which has better protection and strengths where banks have weakness. If the Insured is not happy with the terms and conditions they are entitled to cancel within 14 days. This clearly wasn't the case here. If one is going to enter into a legally binding contract, one would read the documents. When you buy something on hire purchase, rent or buy a house, start a job, sort a will etc. do you not read the print? Foolish if you don't so be careful how you answer.

RE your point about post 'not arriving' you and I both know this is complete rubbish half the time. 'I didn't receive it therefore it's your fault'. Well it's down to the Royal Mail and lost post should be reported to them. It is the Insured's responsibility to give notice of intention in good time. The terms of the contract state that the Insured should contact them before the renewal date. If the Insured has forgotten the date of renewal, that's their negligence. If it is a tacit renewal then the consequences are that the policy will automatically renew so, again, it is irrelevant that the policy was incepted without payment because these are not the terms agreed to and by agreeing to the original T & C's, this can be taken as a promise to pay irrespective of the payment declining. There are areas of the original post that concern me and which are not ringing true. It's amazing how the Insured receives original documents, fails to receive the renewal notice and notice of cancellation but then receives a letter stating monies owed. Co-incidence? Hmm...

NTU'ing a policy can be done with reason up to a point but a broker can't authorise an NTU if it's been a lengthy period. It's a straight forward cancellation.

You're advising the Insured to waste their time with telephone calls, e-mails and watchdogs etc. Why not go the full hog and tell them to write to the local MP or even to Number 10. Just as (in)effective.

Constant moaning may assist because they might just want rid; but don't waste too much time. They've done nothing wrong. You may be favoured if you can prove you have made a complaint which they have not responded to but at the end of the day You haven't received your renewal documents but hundreds/thousands have. I'm sure they can prove it was sent if needsbe. It really does sound like an issue you need to take up with Royal Mail.

Tacit renewal is an important part of the policy. It has reduced the number of those driving uninsured after forgetting to sort their insurance on time. It's added protection. Those that see it as a hindrance would soon change their mind if it were not there; especially if an accident occurred.

Coyote - I came on here to ask for advice for the olds, not to be called a liar, how on earth do you complain to Royal Mail abut missing post when you don't know its missing????

I'll repeat this - they DID NOT receive a renewal notice in the post. They did not receive a reminder, or a call or email when they tried to use what I can conly assume to be an expired card, when the company has all these contact details. The first they knew of any problem was when they received letters threatening debt collectors and at this point THEY called Budget straight away.

Lets face it - who benefits from what I think is bad practice in holding on to debit card details (as I said when many will expire or be stolen or be cancelled through the year) - oh yes, that would be the Insurance company.

Also - the £112 they are trying to charge is not for any period of policy cover - it is admin charges for cancelling the policy so the parentals would have had to pay a years premium that had increased by 41% when no claims have been made or changes (though they could have bought the policy on line for £184 not £240 odd) plus £112 in admin charges, which they offered to drop by half if parents re-insured with them to which the answer was unsurprisingly no. Budget also could not provide the reason why the card was declined - which as the funds were in the account at the time, is still a mystery. Having worked in a call centre - the reason why a payment was declined is stated in on accounts and if it was a card that had expired - why did they not just ring and say that, that the card had expired and they were renewing the policy, can they have the new details?

Thanks for those that have been helpful, I guess in future if I need help on financial things, I'll go elsewhere as I don't appreciate comments questioning my or my parents honesty versus the reliability of Royal Mail.

Coyote - I came on here to ask for advice for the olds, not to be called a liar, how on earth do you complain to Royal Mail abut missing post when you don't know its missing????

LOL. Erm... because it hasn't arrived and you appear to be having great trouble? Surely that's stating the obvious. I'm not calling you a liar dear Ponygirl.

I'll repeat this - they DID NOT receive a renewal notice in the post. They did not receive a reminder, or a call or email when they tried to use what I can conly assume to be an expired card, when the company has all these contact details. The first they knew of any problem was when they received letters threatening debt collectors and at this point THEY called Budget straight away.

So your parents were under the impression that the vehicle was insured as a tacit (auto) renewal? But your original post stated that your mother was worried as she'd be driving with no insurance? If you're saying that she was unaware that she was uninsured then that's her negligence. She would get 6-8 points on her licence.

Lets face it - who benefits from what I think is bad practice in holding on to debit card details (as I said when many will expire or be stolen or be cancelled through the year) - oh yes, that would be the Insurance company.

It's bad practice not reading T&C's and then moaning about it afterwards. If you didn't like the terms/agreement why enter into them?

Also - the £112 they are trying to charge is not for any period of policy cover - it is admin charges for cancelling the policy so the parentals would have had to pay a years premium that had increased by 41% when no claims have been made or changes (though they could have bought the policy on line for £184 not £240 odd) plus £112 in admin charges, which they offered to drop by half if parents re-insured with them to which the answer was unsurprisingly no.

£112 is not for administration. It's for time on cover + administration with pro-rata cancellation.

Budget also could not provide the reason why the card was declined - which as the funds were in the account at the time, is still a mystery. Having worked in a call centre - the reason why a payment was declined is stated in on accounts and if it was a card that had expired - why did they not just ring and say that, that the card had expired and they were renewing the policy, can they have the new details?

Why should they? The Insured party has a duty to ensure that they are fully insured and that payment for premiums are made.

Thanks for those that have been helpful, I guess in future if I need help on financial things, I'll go elsewhere as I don't appreciate comments questioning my or my parents honesty versus the reliability of Royal Mail.

Now you're just being petty and didn't expect a direct response and didn't like what you heard. Your parents integrity was not under scrutiny, neither was the Royal Mail's... suggestions were made in addition to another side of the coin. £112 in charges... doesn't add up. It's not charges !

Right then, I'll try to spell it out a bit more. Mother did not realise the insurance was due for renewal. Nothing had come through the post to say her insurance was due for renewal. She didn't know documents hadn't arrived as she didn't realise it was due. I *think* my insurance renewal is August but I don't think anything of it until my renewal notice comes through.

So she didn't realise anything was amiss, didn't know she wasn't insured, had no idea they'd applied for money and been refused by the bank - she had no idea of any of this until she got demands threatening that the debt would be passed to a collection agency - she got 2 of them dated 10 days apart, but they arrived 2 or 3 days apart in the post. She rang them instantly.

They said the payment had been declined - and yes they should provide a reason why as the bank provid them it - so she could find out what happened. As I say I worked in a call centre too and took billing calls and complaints and the reason for a declined payment was always coded on the account and you told the customer why it was declined - insufficient funds, wrong card details etc so they could then take it up with the bank or realise they'd made the mistake.

Anyway, on this call they made it clear to her that the £112 was not for pro rata cover as they'd cancelled her insurance immediately - hence her calling another insurance company straight after to insure the car. If she'd re-instated the cover, it was the full policy that had gone up 41%, PLUS the £112.

Thats what they said, thats what she told me. I'm not in the habit of not believing her, she's my Mother and had no reason to misreport what they said. I can't see why they'd give her the wrong impression either. If they'd said part of it was pro-rata cover - they wouldn't have been so upset at paying what they told her was simply admin fees for cancelling the insurance - admin fees they can't afford. Admin fees that weren't far short of the full years policy last year (just over £180)

So no matter what you think, that is how she explained it to me and I believe her - for whatever reason documents did not arrive by post and it appears no other attempts were made to contact them when the payment failed for alternative payment details or to inform them there was a problem.

Funnily enough if I've ever had problems with a card payment (Nectar Wine Club couldn't refund me a card payment as the card was changed) they rang me straight away to say there was a problem - I gave them my new card details and it was all sorted.

IMO, and its only my opinion of course - you came over very agressive - and when people are stressed with money worries - especially new people on here, its not a nice impression of the site. I'm not expecting tea and biccies and sympathy - but you do not come across as at all friendly. Having used other sites before, even if you are in the wrong people have a much more pleasant way of explaining things rather than "you are wrong, you are stupid, of course insurance companies papaerwork gets through 100% of the time, you are just wriggling out of money you owe and twisting things"

Well I'm not, and I'm not the first to ask about this sort of thing so of course it happens and is not always the customers fault.

Right then, I'll try to spell it out a bit more. Mother did not realise the insurance was due for renewal. Nothing had come through the post to say her insurance was due for renewal. She didn't know documents hadn't arrived as she didn't realise it was due. I *think* my insurance renewal is August but I don't think anything of it until my renewal notice comes through.

Then that's your negligence if you can't take responsibility of ensuring you have adequate cover and rely on a postal notification. I'm sure you have bills that you pay. Water, gas, electric, mortgage? If so, do you just think 'Well, I *think* the Mortgage is due on the 31st but sod it, I won't think anything of the payment until I get a defaulted payment through from the bank'... no, you have a responsibility to make payment to ensure smooth transition. Does your mother have a calendar or diary she could perhaps refer to?

So she didn't realise anything was amiss, didn't know she wasn't insured, had no idea they'd applied for money and been refused by the bank - she had no idea of any of this until she got demands threatening that the debt would be passed to a collection agency - she got 2 of them dated 10 days apart, but they arrived 2 or 3 days apart in the post. She rang them instantly.

Nail on head. She got 2 of them dated 10 days apart but arrived 2 or 3 days apart in the post. Does this ring any alarm bells or just distant chimes of a nativity triangle?

They said the payment had been declined - and yes they should provide a reason why as the bank provid them it - so she could find out what happened. As I say I worked in a call centre too and took billing calls and complaints and the reason for a declined payment was always coded on the account and you told the customer why it was declined - insufficient funds, wrong card details etc so they could then take it up with the bank or realise they'd made the mistake.

Why should they provide a reason for this? Working in a call centre (providing not banking) you should realise that to save causing embarassment or offence or even incorrect explanation (liability issues) you would simply say 'refer to bank'; similarly as when you apply for credit and refused they do not say anything specifically but to refer to credit reference agencies. Through your own admission on having fault with post (above) perhaps they did send notification... did you ever consider this?

Anyway, on this call they made it clear to her that the £112 was not for pro rata cover as they'd cancelled her insurance immediately - hence her calling another insurance company straight after to insure the car. If she'd re-instated the cover, it was the full policy that had gone up 41%, PLUS the £112.

Again, you are mistaken or the person on the end of the phone is not explaining this clearly. £112 is not derived from charges. You should get a full premium breakdown detailing this £112. As I have stated clearly before, Budget are crap but they certainly wouldn't make charges to the value of £112 for a cancellation. You state 'cancellation' which would imply cover was operative at the time prior to cancellation otherwise it would be a lapse from renewal and no cover offered. Once cover is incepted and an insurer wishes to cancel the policy they must give at least 7 days notice. As this was a tacit renewal with no notification from the Insured party to cancel, this can be taken as a 'promise to pay'. For an insurance contract to exist monies do not have to be taken in order for a policy to be issued it can be done on a promise-to-pay. Your mother has failed to keep to her promise and therefore the policy cancelled. Please insist on a premium breakdown for the figure of £112. Again, this is NOT charges.

Thats what they said, thats what she told me. I'm not in the habit of not believing her, she's my Mother and had no reason to misreport what they said. I can't see why they'd give her the wrong impression either. If they'd said part of it was pro-rata cover - they wouldn't have been so upset at paying what they told her was simply admin fees for cancelling the insurance - admin fees they can't afford. Admin fees that weren't far short of the full years policy last year (just over £180)

Refer to above.

So no matter what you think, that is how she explained it to me and I believe her - for whatever reason documents did not arrive by post and it appears no other attempts were made to contact them when the payment failed for alternative payment details or to inform them there was a problem.

Ask Budget for copies of letters and records of telephone calls. It's not in the interests of the Insurer to not invite renewal unless for exceptional circumstances. It costs more money in aquisition costs to write business and the real money is made at renewal.

Funnily enough if I've ever had problems with a card payment (Nectar Wine Club couldn't refund me a card payment as the card was changed) they rang me straight away to say there was a problem - I gave them my new card details and it was all sorted.

Do you have a contractural relationship with Nectar in respect of a policy for which is required under UK Law? You can see my point here...? The original subject matter is not one of a company wishing to flog a bottle of cheap plonk to a nation already renowned for exceeding recommended daily consumption. Besides which this is money due back to you as a refund... not money owing to them.

IMO, and its only my opinion of course - you came over very agressive - and when people are stressed with money worries - especially new people on here, its not a nice impression of the site. I'm not expecting tea and biccies and sympathy - but you do not come across as at all friendly. Having used other sites before, even if you are in the wrong people have a much more pleasant way of explaining things rather than "you are wrong, you are stupid, of course insurance companies papaerwork gets through 100% of the time, you are just wriggling out of money you owe and twisting things"

Slightly defamatory as I've not said you are wrong, nor stupid. Nor did I say that insurance companies paperwork gets through 100% of the time, that you are wriggling out of money or twisting things. If you were paying attention you'd realise quite the opposite. I'd be very careful if I were you. I point out the facts that you have considered almost less than one side of a two sided coin. I make no apology if you are offended by a response that you were not hoping for and one which was intended as methodical approach and assistance.

Well I'm not, and I'm not the first to ask about this sort of thing so of course it happens and is not always the customers fault.

No, and no one is saying it is... but people are quick to blame others without considering all avenues. If you seek a toned-down sissy response which backs you up and agrees with your every comment and one which urges you to waste your time writing to the local MP then this just speaks volumes for the reassurance issues you find challenging you.

Best of luck!