# E-Car's Excessive Charges



## Grizzle (Jul 12, 2006)

So i took out a policy with them for the Impreza on the 13th June 2011 by the 14th june i had cancelled at 16:30hrs.

reason being they wouldnt accept a commerical policy no claims certificate, no mention of that on there site hey ho that's life.

So sent an email on the 14th June at 11:24hrs and asked to cancel the policy, received an email from Alex at 16:18 to say 

"On cancellation you will be charged a £75 cancellation fee, and Time on Cover. 

We require you to specify a time and date from which you would like your policy to cancel, and confirm you have read and accepted our Terms Of Business. 

We then require you to return your Certificate of Motor Insurance, any refunds due will be calculated and issued within 30 days of the date we receive your certificate." 

Hmmm £75 is a bit much but thats fine its a business not a charity, i sent him an email at 16:24 to ask him to cancel as of 16:30hrs on the 14th june 2011.

it then takes them 6 days to send my document out second class, i resent them back same day first class with an "URGENT" sticker attached :lol: and gets an email to say they received them on the 22nd june 2011, so 8 days from buying, cancelling, receiving and resending docs to them receiving the docs back. 

I gets an email on the 22nd June 2011 to say 

"I can confirm receipt of your Certificate of Motor Insurance on 22/06/2011, any refunds due will be calculated and issued within 30 days, of the date we receive your Certificate. 
" 
So i have to wait 30 days for a refund minus £75 what a joke 30days interest they will be earning on my money, anyway today (earlier than expected i suppose) i gets a refund minus £75... fine, but also minus £80?!  so they have charged me £10 a day for the 8 days while the docs were in the post 6 of those days were them sending it out in the first place 

is this acceptible? i wouldnt mind a day or two days but eight days thats just excessive.


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## Shiny (Apr 23, 2007)

Let me get this right? You asked them to cancel the policy and the they had not yet sent out your certificate. So you had to wait for them to post it and then return it before they cancelled it?

If that is the case, then they should have cancelled straight away on the 14th June as the certificate was in their possession at the time of request.

Your time on risk charge within 14 days cooling off should be the "Insurers" time on risk charge (£premium / 365 x no of days on cover ) plus a reasonable admin fee to cover costs as detailed in the TOBA you would have been issued when the policy was taken up.

http://www.fsa.gov.uk/pubs/hb-releases/rel73/rel73icobs.pdf You need to look at ICOBs 7.

_ICOBS 7.2.3 06/01/2008

The amount payable may include:

(1) any sums that a firm has reasonably incurred in concluding the contract, but should not include any element of profit;

(2) an amount for cover provided (i.e. a proportion of the policy's exposure that relates to the time on risk);

(3) a proportion of the commission paid to an insurance intermediary sufficient to cover its costs; and

(4) a proportion of any fees charged by an insurance intermediary which, when aggregated with any commission to be repaid, would be sufficient to cover its costs_


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## Grizzle (Jul 12, 2006)

Yes and no, I bought it online at 16.09 on the 13th June 2011 and cancelled at 16:30 on the 14th June 2011 i have an email from them saying it has been cancelled, but wouldn't get a refund upon return of the docs and 30 days after they received the docs, £75 fee fine i have no issue but the £80 is a joke.

I have all emails and receipts from the policy purchase.


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## Shiny (Apr 23, 2007)

http://www.ecarinsurance.co.uk/terms.php#cancellation
http://www.ecarinsurance.co.uk/terms.php#policyadmin

By my reckoning the time on risk charge should be 1/365th of the Insurance premium payable to the Insurers (ie nett of ecar's original admin fee) plus their £75 fixed cancellation fee.

If you are being charged an additional "pro-rata" charge of £80 for 1 days cover, then your annual premium would amount to £29,200 or, if they are basing the charge on 2 days cover, then £14,600!

The £80 "pro-rata" charge needs to queried. The downside of e-car though, i don't think you can really speak to them about much and it costs over £1 a minute!


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## Grizzle (Jul 12, 2006)

Yeh the phone calls are useless they seem to respond fairly quickly by email, but i will be pursuing it to the end, thanks for your advice Lloyd its much appreciated.


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## Shiny (Apr 23, 2007)

No worries mate


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## Grizzle (Jul 12, 2006)

aww it gets better...

this is there explenation

Time On Cover £0.80 + £0.01 Time On Legal Cover + £75 Cancellation Fee + £75 Commission + £4.50 Insurance Premium Tax On Commission = £155.31 - £378.93 Policy Holder Paid = £-223.62 Returned Premium. 

Commission?


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## Shiny (Apr 23, 2007)

I've come across this before and it is a shocking practice. I would tell them that you are going to refer your case to the FOS (Financial Ombudsman Service) as charging their commission can not possibly be a fair measure of a "reasonable charge" for the work they have done to cover their admin fees (that's that the £75 fee is for!)

_(a bit of cutting & pasting & changing of names from the same sort of thing i posted elsewhere on the web)_

Lets put this commission into perspective.

The FSA's ICOB states a reasonable and fair admin fee (or something like that) under cooling off.

Customer A pays £5,000 premium and customer B pays £250 premium. Let's assume Ecar earn 10% commission. They both cancel after 1 day so they both get charged 1/365 of their annual premium by the insurers (£13.70 & £0.68 respectively) as a "time on risk" charge.

Then on top of that Ecar charge their commission plus an admin fee of £75.

So, for exactly the same amount of work and admin, Ecar charge customer A £575 and customer B £100.

This can not be deemed fair or reasonable. Both should have a fixed equal charge and in my opinion Ecar shouldn't be charging the commission to their customer, especially when they are charging a fee of £75 to cover their admin.

My opinion is that the FOS would look at this case and think that charging the full commission is unfair. It could be construed as a penalty and probably taking advantage of the customer and therefore I think Ecar would struggle to win the case. They could probably get away with this outside the cooling-off period but not within the cooling-off period.

This was from BIBA after a recent meeting with Peter Hincliffe (from the FOS) on "Mid Term Adjustments", more specifically cancellations after the 14 days. Bear in mind that the FOS will take a much stronger stance with cancellation within the 14 days cooling off period -

_From the FOS point of view, price (for the cancellation) is not the main concern but rather the fairness of the cancellation clauses/provisions. Is it a an unfair term? Is it onerous in legal terms? Is it a penalty? Is it taking advantage of the customer? If a term is deemed unfair then it is unenforceable in law so it would not be a matter of compromising on the amount of the cancellation charge. The whole amount could be disqualified by the FOS_


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## Shiny (Apr 23, 2007)

From what i can see in their TOBA, there is also no mention of retaining the full commission either.

Charging near on £155 in fees & commission for 1 day on a policy cancelled within the cooling period is ludicrous. Especially as it is internet administered policy where basically you do all the work yourself!


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## Grizzle (Jul 12, 2006)

yeh i'm shocked Lloyd and just spoke to a nice woman at the FOS who also thought the charges were excessive and is sending out complaint forms, i'm taking this the full road. 

Again thanks for your help and wisdom, i may call on your help very soon (via PM this time lol) 

DW to the rescue, love it.


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## Shiny (Apr 23, 2007)

The FSA make these rulings to tidy up the industry with TCF (treating customer's fairly) at the forefront of everything a broker/intermediary does.

Things like this continue to give the industry a bad name and it annoys me so much. 

I'm certain the FOS will rule in your favour. You will probably still end up with a £75 admin fee as this is in their TOBA, plus the Insurer's 80p TOR charge.

As i see it, admin fees in TOBA's should be an "up to" amount and then each case can be assessed on it's own merit and the amount of admin actually involved. With an insurer's TOR charge of 80p you'd have been seeing nearly all of your money back with us, especially as the circumstances were down to unacceptable CV NCB.

I hope you can sort it out mate and Ecar get a wrap on the knuckles from the FOS..


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