5 replies to this topic

[yorkshirechris]

No, it isn't another "how much is my insurance thread" its a rant-come-information topic...

My car insurance with Lancaster Insurance has ALWAYS been paid on the 1st of each month, by agreed direct debit. Got my renewal through a couple of weeks back, as the insurance is due for renewal on April 24th. I specifically told the insurer over the phone that I want the direct debit to continue being debited on the 1st of each month, and they said the first payment will be taken on May 1st.

All fine and dandy until I checked my online bank account yesterday to find they've taken the first instalment on April 17th, without even informing me, let alone asking for my permission. That £41 has now left me short until the end of the month.

This morning I called Lancaster insurance with one question - why on earth did you take MY money without my permission - and one demand - that the money is refunded back into my account asap. They made some daft excuse about it being taken on the 17th because the 17th of April is closer to the 1st of April than the 1st of May (?!?!) and tried to tell me I should've rang them if I wanted the direct debit to be taken on a different day to normal - even though it's ALWAYS been on the first of the month - and I specifically told them on the phone last week I want to keep it that way! They then said call the accounts department on monday, but then after a word with the supervisor, advised me to call my bank and request an indemnity claim on that direct debit, so the money should be reclaimed immediately, and the direct debit then needs to be setup again to the 1st of each month. Fair enough I thought.

So after 15 minutes on hold to my lovely bank, Alliance & Leicester (can you sense the sarcasm?) I was told that an indemnity claim/mandate cannot be raised for that direct debit because it's not come out of the wrong account and that there is a direct debit setup to that company! Also I was informed that any company you have a direct debit setup with can AT ANY TIME change the date that comes out of your bank account! Whether they have to inform you of this I don't know, but I certainly wasn't informed or asked by Lancaster Insurance yet my bank said they would not be able to claim it back from them.

Then after a bit of arguing/explaining the bank said they will claim the money back, but it could take "a while" - which translates to "a few weeks" in their terms! >

I will certainly not be paying my car insurance by direct debit anymore... they can take the money when they like, and not even inform you of it. So unless you too want to be left having to borrow money to get yourself through the month I'd recommend cancelling your direct debit too!

Edited by yorkshirechris, 19 April 2008 - 05:38 PM.

[Ouster]

Cheers for the heads up.
That's quite shocking really.

[minislapper]

Not got anything to hand but, I'm sure the Direct Debit small print says they can change the date and the amount at their discretion.

[Dan]

Your insurer has broken the Direct Debit Guarantee.

All changes to Direct Debits whether of amount or of date must be notified to you in advance and may not take place less than 10 days after YOU RECEIVE the notification. Any amount that is collected without notification is considered an erroneous payment whether the correct amount was taken or not and MUST be refunded instantly when they discover their error or when you notify them of it. If any financial institution is guilty of breaking the Direct Debit Guarantee consistently they loose the right to collect any Direct Debits at all.

Call you insurer again and make sure they know you are taking a transcript of the call, ask to speak to a supervisor and ask their name. Tell them directly (don't mess around) but politely that they have broken the Direct Debit Guarantee and that you are going to persue the matter with BACS (the company who run the Direct Debit system) and the Financial Services Authority and inform them that your bank will be in touch to organise a refund. Then call your bank again and tell them the same things. It is your bank's duty to instantly refund your money and to put your account back into the condition that it would have been in if the error had not occurred including refunding any overdraft charges and making any payments that were refused while you were overdrawn. They may not charge you for any of this and all the costs have to be met by the bank and ultimately passed on to your insurer. Make sure these people know that you understand your rights and how the Direct Debit system works. Get a leaflet from your bank about the Direct Debit Guarantee (it's usually written on the back of Direct Debit forms that you fill in).

Here is a very useful page about the rules for Direct Debits.

The Direct Debit system is run by Bankers Automated Clearing Services (BACS) through a part of their company known as the Association for Payment Clearing Services (APACS). There should be some information for you on their sites. The system is very tightly controlled to maintain consumer confidence in the payments and they take it very seriously when they find banks and companies abusing the system.

Good luck with this.

[yorkshirechris]

Thanks Dan for a very informative post.

When I spoke to my bank, they said because the direct debit is setup, and it's come out of the correct account, then they can't instantly refund the money because, I quote "any company you have a direct debit setup with can change the date of that direct debit at any time". Whether they've given me notice or not (they certainly have not) is irrelevant to my ever-so-helpful bank who don't care. I suppose from their point of view, my insurer could've given me notice, and I can't prove they haven't, so it's nothing to do with them. Which doesn't help the situation at all.

The 10 day period is interesting - I renewed my insurance on the 10th of April and the Direct Debit was taken on the 17th - so even if they DID inform me on the 10th (which is their word against mine, and surely things like that have to be confirmed in writing? Taking an extra few days), they shouldn't have taken the direct debit until the 20th at least. I think that's going to be my main argument when I ring the bank in a minute.

I'll update this when I've spoken to them.

[yorkshirechris]

Just spoke to the bank.

Turns out I was misinformed by the ever so friendly member of staff yesterday, and the department who deal with "overpayments" as they call it will deal with it immediately and the money SHOULD be back in my account by Wednesday. Luckily I can just about get by until Wednesday without having to borrow extra money but if I do need that £40 I'm going to withdraw it, taking me over my overdraft, and will look forwards to speaking to them again if they have the audacity to charge me for it!

Thanks for your help