Motor Insurance Conundrum

Good news - DD has had all the money returned to her bank account and has cancelled the direct debit. (It was just a normal direct debit after all). She took your advice Anya and asked for the CEO details so I think that did the trick. Many thanks.

I'd still say go to (or phone) CAB and ask
1. is there any danger of the cardholder being penalised when the payment lapses (think credit record here)
2. is there any come-back against the bank for not advising her to cancel and replace the card
3. whether the insurance company had acted improperly in any way that could be held against them

You don't have to own a vehicle in order to take out an insurance policy for it, e.g. my van was in my husband's name but the policy was in mine.

It is illegal to have a vehicle on the road that isn't insured, so I suppose that it is not unreasonable for the insurance company to demand the policyholder's confirmation that the policy was no longer required. But I wonder what would happen if there was a claim against the vehicle and Dil's insurer discovered that there was another policy that covered it elsewhere, e.g. if it was damaged while unattended.

And avoid these 'continuous payment' authorities that you can't control. It's OK if it's set up on a website that you can get at to cancel or change, but not otherwise. Direct Debits are often more difficult to set up (download, print, complete and post) but they are easier to cancel.

Get The Times for Saturday. There is a money problem section. They are good at this sort of thing and you can email them.

You need to check the terms and conditions of the insurance company re penalties before you do anything, and then contact www.citizensadvice.org.uk - they are usually very helpful.

Of course the company can't keep helping themselves from her bank account. It isn't as easy to cancel 'continuous payments' on debit or credit cards as it is 'direct debits' on bank accounts, but her bank should have advised her about that. They would need to cancel her present card and issue her with another, with a different number, which should take only a few days.

Direct Debits are OK - they can be cancelled at the click of a mouse on your online banking or in a branch. Continuous Payments can't, the bank doesn't have a record of those even if it's on their debit card, so don't use them!

When an insurance company finds that a payment has been failed, they usually contact the policy holder and tell him that the policy will be cancelled if he doesn't come up with an alternative source of payment within (probably) 14 days.

The only problem might be a penalty for the rejected payment. You need to be sure that it will be the policyholder who gets clobbered and not the cardholder, which is why you should contact the CAB first. It is unlikely that you will get any refund unless the CAB say that the fact that the company was advised that the van had changed hands, or that the bank did not advise as they should have, carries any weight.

Good luck!

VCIL appears to be the intermediary, not the actual insurer. Go straight to the Financial Conduct Authority.

Or trading standards.

CAB might be able to advise - if there is still one in your area - ours has just been closed down.

Grrrrrh!!!!!!! This awful Company STILL took £120 out of DD's account yesterday despite her best efforts to stop them. Warning DO NOT ever deal with a company called VCIL Insurance. They are dreadful and I've found a few complaints from other very dissatisfied customers on the web. Will not be letting this go. Pass this on to your friends with vehicles please.

Many thanks for all advice. I've passed your views on to DD. I'll keep you posted as to any developments. Best wishes to all Grandparents out there. With age comes wisdom and serenity.

Presumably the van is covered by a new policy in the name of the new owner. The previous policyholder has no insurable interest in the van, so his policy has been void from the moment he relinquished his rights to the vehicle. Any premiums paid from that date should be returned by the insurer to the person who paid them. If they still feel they cannot stop collecting the premiums, ask them to set up a monthly refund to your DD for the same amount, so everybody ends up all square. If they cannot see the absurdity of this then take it up with a letter to their Chief Executive copied to the Association of British Insurers (if it's an insurance company and not Lloyd's), threatening to go to the Financial Conduct Authority, or whatever it calls itself now.

Find out the email address of the company's CEO and email him or her directly. I've done this on two occasions one for Saga motor insurance and the other after an issue with BT. Both times I had my money refunded within days.

But it's a vehicle insurance policy, not a bill that has to be paid, like Council Tax!

I think your DD needs advice from someone experienced in such matters. Most solicitors offer a free half-hour consultation - make sure it's someone who specialises in financial matters. I'm sure it can be sorted out.

Perhaps I should have typed 'perhaps'!

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The difficulty could result in your DD being taken to court if the payments are not made.pherhaps she could go to small claims court to recoup her loss.

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If it's your DD's bank account surely she can stop paying it? That's ridiculous...she should threaten to close her account with that bank and take her business elsewhere if they can't be more helpful!

Sadly Ana she has tried this but apparently it is being paid by automatic continuous payment which the bank has no control over. So even though it is DD's account he has to give permission as the policy holder. I know this sounds as if the insurance company are as crooked as the Ex! Aargh.

I take it she's cancelled the direct debit to this company? If they won't refund the overpaid premiums, at least she won't be paying any more and the policy will eventually expire.