A frugal life is an easy life!

I understand your frustration, but that is how the system works. Admin fees are charged to cover the cost of changing a policy over - those call centre staff do not work for free, the computers and their systems (very pricey to set up and run) cost one hell of a lot, printing, sorting and sending out official documents costs more than you would imagine. You have a choice of paying the admin fee when you make a change, or having your original policy being more expensive at the start. Which one are you more likely to go for?

Cancellation charges are no different - you entered into a twelve month contract with the company, and you are choosing to end that contract early. Any company does this, whether they are giving you a mobile phone package, TV, broadband, rent. The admin costs are exactly the same, but you are also causing the company to make less money than expected, and they are trying to recoup that loss. I am surprised they would charge a cancellation fee if you are staying in-house, though.

One point I will agree with, you were given bad customer service by both members of staff - they should be able to share information so you don't have to explain yourself twice, and should be better able to explain things such as admin charges etc. However, this is no excuse for a 'wild rant' at someone who is just trying to do their job, and will not be able to do anything different, rant or not. All it served to do was to inflate your ego, and piss off both sides, making them more likely to offer you (and other customers) a bad service in future.

[Full disclosure: I work for an insurance company, not Direct Line, and have to explain these things to people every day of my life, hopefully in a slightly better way than you have experienced.]

Thanks for posting Bob.

Companies selling goods and/or services, want customers to believe the system is correct, it is not.
Under pinning every goods and/or services transaction in England and Wales, is a process of common law.
The "system" so often quoted by staff working for companies where there is a dispute with a customer, is nothing more than the processes that the company concerned use to carry out their business, until such time as those making the laws step in and force them to change their "system"

When a company quote the "system" - as justification for a charge, they are misleading their customer.

There are so many official bodies and consumer groups today, its easy for businesses to tie customers up in knots and give them the run around, but one factual protection remains, for both parties, the rule of common law and legal precedent.

Admin fees:
- If a fee is charged and a company cannot present an accurate breakdown of what this fee is made up of, ie, actual cost - the admin fee, under common law in England and Wales, becomes a penalty charge.
- If a fee is charged and a company cannot present a factual breakdown of what the individual customer has requested, has cost the company, then the admin fee becomes a penalty charge.

Penalty charges under common law in England and Wales are unenforceable. Legal precedent over rides any "system" in a magistrates court.

Take the £29 I was to be charged - £5 for an automated printed letter to be sent out, a generous £2 for postage, this would still leave £21 of the charge for paying a member of staff for their 20 minutes.
Even a very generous pay rate of £10 per hour for Direct line advisors, and allowing for half an hour for my actions, would still only cost the company £5 in actual wages.
Total actual cost for the company - £12 - yet they are charging an admin fee of £29, where does the extra £17 go to?
This is profit, and if profit is made from any charge issued to a customer it is deemed to be a penalty charge and unenforceable under common law.

In previous years, costs of admin would be factored into the price quoted for their service/product - that they no longer do this is not the customer's responsibility. It is a similar position to booking a flight on ryan air, only to find that basic charges are added to the headline price, which is misleading and I believe will be changed by the powers that be, in the near future.
I'd go further and question why prices for insurance have continued to rise above inflation, whilst "admin fees" are no longer included in insurance prices?

Cancellation charges:
I do not enter into a 12 month contract with the company, another common misconception.
If I had paid for 12 months cover in one lump sum, I would be entering into a 12 month contract, as I pay monthly, it is the company's way of doing business that has cost them money.
Direct line CHOOSE to aquire money and pay the entire 12 months in one lump sum, this allows them to charge me interest on the full amount over the course of 12 months. This interest increases their profits.
Insurance is not a 12 month credit agreement - I pay a fee each month to be insured, if I only take insurance with them for 6 months of a year, I am within my rights to cancel all payments for the service offered or in this case, the insurance cover offered.
If I am wrong, the insurance company would be able to charge me for the remaining 6 months of the policy that I have opted not to carry on with, and I would expect a magistrate to rule in their favour.
The fact that insurance companies do not charge for each month not taken up and there has never been a legal precedent for a case under common law, finding in its favour or brought before a court, would suggest that my position on this is entirely accurate.

If any company then charge a "cancellation fee" for not going full term with an insurance policy, when paying each month, this is a deemed under common law to be a penalty charge and is unenforceable.
Once again, legal precedent over rules "the system" that staff of businesses of all kinds point to, to try to justify taking money from customers.

I would disagree with your view on my reasons for having a "wild rant" at staff - those I spoke with were representing the company, they were making me pay charges that there is no legal precedent for and are unenforceable under common law in England and Wales.
Quoting "thats how the system works" and then taking almost a days pay from me, is simply not good enough.
Many simply refuse to put me through to their manager, as they know that once I present my case to a manager, the charges they are so insistant on charging me, will be waived.

The common attitude of many call centre staff is that the company wouldn't be allowed to do it, if it wasn't legal.
Yet in almost every single case where I have represented people, once put through to a manager, the charge or charges have been reversed.
In every single case where I have asked for written confirmation of a breakdown of a charge, to show the actual cost it is costing the company, not one single company has presented one - "no company will do this" is a common statement, why do you think this is?

If companies cannot or will not present a breakdown of actual cost to a customer, of a charge they are imposing on the customer, then it is unenforceable under common law.

It's nothing to do with "my ego" - it is to do with stopping a company flouting common law and legal precedent and misleading me as to why and how they are allowed to take money from me in charges.

Appreciate you taking the time to comment, its always good to hear from those who have experience.

I cancelled my breakdown cover with direct line.
well they cancelled it but told me that I had to pay the remaining money until the end of the year as a penalty for cancellation.
They have just sent me a final demand for the rest.

hey up John,

this kind of "penalty" is being charged for all kinds of things... mobile phone contracts, car insurance, etc.
personally, i would contest every single one of them.

companies excuses range from "its the system" to "we base our business income on a full term contract" - the fact is, its nothing to do with the individual, it is a penalty charge and as such is unenforceable under common law.

any charge on an individual/business that does not recover actual loss is deemed to be a "penalty charge" and unenforceable.

the sticking point the company that try to impose the charge make, is that their "actual loss" is because they credit the individual then in effect loan that back to the customer, allowing them to pay by installments, making it more convenient for them etc.

this of course is utter tosh!
it is the company's own business decision to pay the full term up and allow the customer to make monthly payments - often in return for a fee or interest payment - increasing their profits.
i have never paid the rest of any "contract" up when i have left it earlier than the full term... i doubt i ever will, as the company demanding the paying up of said contract, are claiming back profit - which is not actual loss and leaves them without a leg to stand on in a small claims court.

forget the ombudsman, appeals process, etc, the small claims courts uphold the law, all the other bodies put in place to "sort things out" are there to stall the process and deny the individual their civil rights.

unless the company issuing the charge can prove that the payment they demand from a customer for leaving a contract early, is actual loss, then they are blowing in the wind.
good luck.

Hi,
I have been reading your posts and I have found it very interesting.
My car insurance was with Budget pay monthly I got a renewal through the post end of oct for £400 more than last year on third party fire and theft,
Of corse like you do I went and compared other companys and swift cover fully comp £340 well theres a huge difference I of corse went with swift cover and paid my deposit,
Last friday I recieved my insurance documents from swiftcover which were all fine but also recieved insurance documents from budget.
I rang straight away and stated we did not need it shall i send certificate back? The lady on the other end said the policy holder would have to ring within 14 days (which is my husband)
So saturday i asked my husband to ring them he was told they have already taken over £60 and it would cost us £38 to cancel this policy we didnt even ask for!
I think this is disgusting to just use our bank details to help themself.
I got on the phone "ranting" they said they could give us £10 back i dont want £10 back i want my money back that they took without me knowing "it is in the small print if the policy holder does not cancel before it ends we will continue to insure you, we dont want our customers to drive around uninsured" Surely that would be my problem i am absoultly fuming in one week £120 has gone on insurance for the same vehicle, we are a young couple with two small children and £60 especially this time of year is alot of money to us.
Am i likely to get my money back or should i just give up?
I would like an apology and my money back i think it is a terrible way to treat your customers!

insured my car with direct line, litle vauxhall agila 1.0L 51 plate and 42k on clock, hit ice, span out and arolled into a telegraph pole. avg value of car was 2-2.5K they offered me 1400. i refused and gave them 10 examples of cars with 50k+ millage, ALL above 2.2k price. the guy cameback with £1600, and used the phrases, "it neeeded a valet !!!! it had a parking dent on the rear side !!!! it had gravel chips on the front !!!" this is rather confusing for a car, that has rolled 3 times down the road, and came to rest with the aid on a telegraph pole side on. i might add this is with refusal to provide photographic evidence to my email. so i rang directline, made the complaint and was tp;d we would be contacted by their internal total loss engineer. 3 days later, i recive a letter saying that my cheque for 1500 will arrive in 3 days, 1600 - 100 eccess!!!!! am about to ring them now, and give them an ultimatum.... " £2500 , or i will now be reporting them to their governing body, for trying to push their undervaluation on me, which i know is illegal without my acceptance of their offer"
bottom line avoid directline, if u want a real offer made on a claim. they are cheap, but for obvious reasons! insure a £10,000 antique, you clain, expect £5000.

just an update to the above.
i have now returned their cheque to them, along with a very clear letter of complaint, so i may now goto the obussmen. their engineer also agreed that the value of my car was £2500 with milage taken into consideration, he however agree's that there was over £900's worth of damage to the car pre accident, so he will not increase the value. since our refusal to settle, they have rang on 3-5 different occasions making threats towards myself and my wife. one i can remember making me chuckle, was that if i DON'T accept their offer, then we will be charged for holding the vehicle. very strange why they would want to get my car off to a scrappy, as it holds all this vital information as to devalue my pay out by 900 another one was, if you do not settle we shall charge you the full premium, and last but not least is the old: "i am ringing to comfirm that your happy with our final offer, "no" , yes but if you can confirm now that we have made a final settlment offer.... "no, i am not agreeing to anything on the phone" yes, but i need you to accept this offer was made so YOU can goto the ombusmen... "nope, because the offer was rejected" ok sir, have a good day...
Direct line are seriously nasty con men, who will try everything posible to screw you over. including fraud