Cancelled Insurance, Payments Still Taken: Where Do I Stand?

Q.

Over 3 years ago I sent a letter of cancellation plus £25 00 cheque as requested to my mortgage provider to cancel my buildings insurance. The cheque was cashed, yet despite many calls and providing all info required they continue to take out payments for insurance which as I have proved is now and has been provided by another company since February 2006.

Do I have a case for breach of contract?

A.

In all cases an insurance contract will come with terms and conditions on cancelling the policy. I am assuming the cheque sent was required to cover administration costs when cancelling. You notified the insurance provider in writing and provided all the information required to cancel the policy. The fact that the insurer is still taking payments from your account three years later would mean a breach of contract.

Making a Complaint to Senior Staff

In the first instance I would cancel any direct debit set up to this company as I am assuming this is how this insurance company is obtaining payments from your account. The next step would be to reclaim these charges; a strongly worded letter to a senior member of their staff should be sent. This letter should include all details of your complaint and the intended course of action that will be taken if the payments are not refunded. Always keep copies of all correspondence and include a copy of the original cancellation request with your letter to the company.

Complaining to the Financial Ombudsman

The insurer should also have a formal complaints procedure in place and this route should be used as part of the complaints process. If you have followed the insurance company’s complaints procedure and still have not received a refund then the next step should be the Financial Ombudsman.

All insurers in Britain must comply with the rules set out by the Financial Services Authority (FSA). The Financial Ombudsman will attempt to find an outcome through both parties but if they cannot resolve the matter in this way they will investigate the matter in more depth. The insurance company has to comply with the final ruling of the Financial Ombudsman.

Using the Courts to Make a Claim

An insurance contract is legally binding and this matter can be taken to the county court if you are not satisfied with the judgement of the Financial Ombudsman. This is a way to take the matter further and the threat of the county court may be enough to make this company pay. Claiming in the county court should always be the last option after trying the Financial Ombudsman. Anyone who is considering this option should ensure they have all of the necessary evidence to make their claim. Legal advice is not necessary but is advisable before using the county court option.

More information on the Financial Ombudsman can be found at their website www.financial-ombudsman.org.uk