Admiral Fun and Games

[Seminole]

I'm having a lot of hassle with insurers this year and I've just fallen into a bear trap with my car insurance renewal.

 

Renewal quote came from Direct Line showing a premium increase of 25%. They refused to reduce this probably because I had a windscreen claim last year.

 

Used the Go Compare website to get competitive quotes. Admiral weren't the cheapest but they were the most reasonable of the names I recognised. I linked from the Go Compare website to the Admiral site and the premium shown there was unchanged. As I wanted to pay by monthly direct debit, I had to ring them. We had quite a convoluted conversation in which they tried to sell me a multi-cap policy and a number of insurance premiums were quoted.

 

In the end we settled on the single car policy and I remember being told that there would be an interest charge as expected.

 

When I got the policy documents through I was surprised to find that they had not only added the interest to the premium but also increased the premiuy=m by a third (approx £100). Admiral have explained this in an email as follows:

 

"ny quote on

GoCompare assumes that you wish to pay your premium in full. Admiral give a

discount on premium if you are to pay in full, this is lost if you pay by

direct debit, an interest charge is also applicable if you pay by direct debi"

 

I've now offered to pay the full premium in one go and am waiting for a response.

 

Even by the standards of insurance companies, I think that this is very poor behavior. To some extent the fault lies with me as I should have tied them down to precise numbers when I spoke to them on the phone but I think their pricing and business tactics are very dodgy indeed.

[unclebulgaria67]

When you phoned them to take out the policy and arranged monthly payments, they should have confirmed the payment details. This would have been purely how much the payments were and when they would be collected. If the documents match what was said on the phone, then Admiral have met any regulatory requirements.

 

As far as I know there would have been no requirement of them to state on the phone that the annual cash price would be higher because you were paying monthly. Though the documents should state the full details. Charging a higher annual premium for monthly payers or more like offering discount for cash payment, is a fairly new practice, so I think FSA compliance rules have not caught up with this.

 

You could pursue this with the FOS, if you wanted to kick up a fuss, but I think Admiral will just adjust the premium to the cash price, now you are paying annually as a lump sum.

[Seminole]

The more I think about it the more I can't think of a valid reason for them to not show the undiscounted price on their website and to make you call them.

 

The only reason I can think of for this is to do precisely what they did to me.

 

I've written to Go Compare asking them about this as the Admiral email implies that all insurance companies do this.

 

At the end of the day, I'm livid but life's too short to fight battles unless I have to. Nevertheless, if Admiral don't take up my offer or try to charge me anything more than the original premium, then I'm going to war.

[Wulfyn]

Hang on - when you agreed to take out the cover using an installment method, had the person you were talking to confirmed the price?

 

 

Might be worth making a complaint and asking for a copy of the call log. Sounds like they are being very sneaky here, and I don't think that it is legal.

[unclebulgaria67]

Might be worth making a complaint and asking for a copy of the call log. Sounds like they are being very sneaky here, and I don't think that it is legal.

 

Are you saying that Insurers offering a discount for annual cash payment and withdrawing this for monthly payers is not legal ?

 

If you have had any involvement with working with compliance rules in the industry, you will know that the compliance staff thoroughly review matters, before they roll out any process. This would have been subject to many hours of in-depth discussion, looking at all applicable rules.

 

You are entitled to add your opinion, but have to be a bit careful when you make allegations about companies not acting legally.

[Seminole]

Just a quick update. I'm in the process of negotiating this with Admiral. They have agreed to allow me to pay the premium etc in one lump sum but we are debating the amount.

 

I have no doubt that what they have done is legal in the sense that they won't have breached any criminal law. I do have my doubts as to whether what they have done is lawful. For example, the discount could be viewed as effective a charge for credit and might have to be included in the calculation of the APR at which point they put loan sharks to shame. Personally I'm only going to get into that if we can't reach an agreement over the premium.

[Seminole]

Just a quick update. I'm in the process of negotiating this with Admiral. They have agreed to allow me to pay the premium etc in one lump sum but we are debating the amount.

 

I have no doubt that what they have done is legal in the sense that they won't have breached any criminal law. I do have my doubts as to whether what they have done is lawful. For example, the discount could be viewed as effective a charge for credit and might have to be included in the calculation of the APR at which point they put loan sharks to shame. Personally I'm only going to get into that if we can't reach an agreement over the premium.

[Seminole]

Finally had a proper reply from Gocompare. Here's what they have to say:

 

"With regard to paying your insurance via direct debit. Admiral offer a discount to customers paying the whole premium in one amount by credit card or Switch. The ability to pay a premium in one lump sum is a lifestyle indicator and their claims experience with previous policyholders suggests that customers paying for their policy by Credit Card or Switch are less risky to them in their in terms of making claims, hence the difference in premium.

The premiums displayed on the Gocompare website for all insurers is for an annual one off payment. If you choose to pay your insurance this way, the premium quoted on Gocompare is available. If you choose to pay for your cover by direct debit (with Admiral) you lose the discount applied for paying your premium in full.

 

Whilst we cannot comment specifically about any other companies premium calculation, it may be that other companies take different aspects into consideration when calculating their premiums."

 

I can see the logic in this argument but it isn't made at all clear on their website and I think it makes the comparisons highly misleading to the point where using Gocompare for anything other than one off annual premiums is meaningless.

 

Anyone have any thoughts on this?

[unclebulgaria67]

It is up to you, but I think you could take your complaint about gocompare to the FOS. Ask the FOS, if they would be willing to look into a complaint about this.

 

On the basis that a good percentage pay monthly, if the comparison site, shows the annual amounts, this could potentially mislead people.

 

Following a complaint to the FOS, this could lead to the FSA taking a look into the issue.

[Seminole]

Quite happy to do that but do I need to exhaust Gocompare's complaints process first and obtain a deadlock letter.

 

So far I've treated this as an enquiry rather than a complaint.

[unclebulgaria67]

Quite happy to do that but do I need to exhaust Gocompare's complaints process first and obtain a deadlock letter.

 

So far I've treated this as an enquiry rather than a complaint.

 

Yes, but you could ask the FOS, whether they would be willing to look into such a complaint. If they won't, there would be no point asking gocompare for a deadlock letter now on the basis of you going to the FOS.

[Seminole]

Fair point. I'll email them.

[Wulfyn]

Are you saying that Insurers offering a discount for annual cash payment and withdrawing this for monthly payers is not legal ?

 

If you have had any involvement with working with compliance rules in the industry, you will know that the compliance staff thoroughly review matters, before they roll out any process. This would have been subject to many hours of in-depth discussion, looking at all applicable rules.

 

You are entitled to add your opinion, but have to be a bit careful when you make allegations about companies not acting legally.

 

 

No I am saying that it is illegal to offer a price and then not honour it - hence my question. If you had read this a little more carefully you would see that the OP got a quote online at £x (which assumed an annual quote). When they called up to confirm they must have stated that they wanted to pay monthly, else the insurer would have asked for the full payment. This is the point at which the insurer should state that the premium has changed - ie that a discount has been withdrawn. This is why I asked if they confirmed the price.

 

If they did not tell you that the premium would change and allowed you to incept the policy thinking it was still at the previous price and then tried to increase the premium later, then yes I'm pretty sure that is illegal. Do you think it is legal?

[unclebulgaria67]

I see.

 

The illegal bit is not telling the customer that the underlying cash price had changed.

 

Would have thought that Admirals compliance people would have built this into the telephone scripts. If they haven't or the telephone staff are not providing this important information, then I think this is something the FSA would be interested in. It is a shame the FSA don't take individual complaints and you have to use the FOS.