Trick & Unauthorized Direct Debit

[Danny_b]

I used to work for a bank that had an agency agreement with CGU.

Like Comminsure, for our customers paying monthly, it automatically renewed. We found that was what most customers wanted, and as a customer, that's certainly what I preferred, and what many assumed happened. However our PDS said that if you are on monthly payments, that it will continue. And there was a big bold box on the renewal stating that it would automatically continue.

Occasionally we'd have customers who'd only had the policy for one year unhappy because we'd continued to direct debit. We normally just refunded the money, as that was more likely to keep the customer happy, leading to return business in the future.

If it had been a few months before they noticed, we generally just asked for proof of coverage with another company, and would only refund if they'd taken out a replacement policy (if they decided not to insure, we wouldn't refund, only cancel the policy from that date).

Unfortunately it comes down to what people prefer, and in this day, most people prefer auto-renewal. But it would be good if the company gave you a choice when you first commenced the policy.

[Charliew]

Thanks for NGE's providing comsumers with such a good forum and passing clients’ comments to service or product providers.

It was found that Comminsue changed their mind and made a full refund to us without so-called cancelation fee they have insisted.

Then we made time to Willianstown CBA branch again to repay $30 cancelation fee the Customer Service Manager put on our account on Monday. The branch manager told us it could not be reversed back for accounting reasons and suggested us to keep it. However, it is not our money for we already got full refund. Therefore we asked the bank to put the money on the account of World Vision Australia Haiti Earthquake Appeal.

One of friends said such small money does not deserve the time and travel cost, but it is all about good faith for both individuals and business entities. Without it, Australia would never be a dreamland. Hopefully the other involved party could understand it and as well as the eastern sayings - to be thankful for being told of one's errors particularly by its clients.

The last comment on this issue. Thanks to NGE.

[Charliew]

We got refund – hopefully it is the end of our story

Today we went to St George Bank at Williamstown, and then dropped in CBA Williamstown Branch, where the Customer Service Manager helped solve the problem.

We told her our story. She explained it that for monthly payment customers it has been conventional for many insurance companies to keep direct debit after insurance expiry if they haven't get a cancellation notice from clients, whereas for yearly payment customers companies do not do that (cause they were never given customers’ authority and account details).

Although she could not find any item on our original policy said the policy would be continue if we do not give a cancelation notice before anniversary date, she gave us a good reason of this convention - suppose a house owner could not receive the letter on holidays and the insurance company would not continue the policy, if the house were on fire, the customer would suffer a big loss. Therefore, insurance companies would renew the policy even though they could not have received confirmation from their customers.

No agreement between two parties, insurance companies continue doing direct debit in terms of customers benefit. It is not strictly follow the law but it does sound reasonable and considerable. However, how about yearly payment customers? They cannot benefit from consideration of insurance providers, if they happen to be overseas for a long term.

Anyway, the Customer Service Manager is so nice with great persuasive skills. If Comminsure’s staff could be of such persuasive skills and give clients such reasonable reasons, no customers would be serious on such small money.

The Customer Service Manager is like one of our best friends at St George Bank who is many years’ nationwide Star of the Year. Both focus on service and taking care of clients. After talk to her, we already forgot the cancellation or administration fee. The nice lady helped us get it back. When doing the transaction, we told her before entering into this branch, we were considering transferring our home loan to another bank and we’d like to suffer the loss. After that, we abandoned the idea. Moreover, we are about to suggest our parents to transfer their deposit of about 200 grand from overseas to CBA in a very near future.

Service is always the first thing. Good service and taking care of customers make benefits and profits.

Hopefully that’s the end of the story.

NGE Note: Please read the NGE Forum Rules before posting again.

[Charliew]

I clearly understand what you mean. Yes, it is reasonable to read all the letters regarding renewal clearly.

However, there is nothing regarding an automatic renewal in our original policy that we signed and agreed with Comminsure in 2009. If there were such an expression as Kadee mentioned above, it would be our duty to cancel to the policy, or else a new policy would be automatically applicable to us. If there were such a clause on our original policy, Commisure staff could have already pointed out. Then we should say sorry and thanks for a good lesson.

Therefore, things are different. They just put the words in a new policy - “If you do not wish to renew your policy, please notify us so we can cancel your current payment arrangements. Otherwise we will continue to debit your nominated account”.

What they said here in the new policy, it is not our legal obligation. The reason is that- for this policy, we never requested, never agreed and never signed it. There has never been an agreement on the new policy, how come there is a policy between two parties? So does the trick clause.

Furthermore, if what they said and what they did are valid, why they still requested us to sign the policy and Direct Debit Authority form again. Because they clearly understand that policy was generated without our agreement and request, they do need our agreement to endorse the new policy, and they do need our authority of direct debit for the new policy as well, although they said they could do a direct debit without our authority.

In the end, what they say in a new policy is not obligations to their previous clients, unless there is certain agreement like Kadee said in the original policy signed by the clients, or unless the new policy was agreed by clients.

We are responsible for what we’ve signed and what we’ve agreed. No agreement, no obligations. We have no obligations to what we never signed and agreed.

If whatever a service provider says would be obligation to their previous clients without an agreement, they could direct debit any amount of money from their previous customers without authority. Theoretically, they could direct debit the world.

Anyway, it is a good lesson.

[computerflyer]

My utilities contract expires in March, and I just received an "opt out renewal" that clearly states that if I do nothing it will renew for another 2-years with full details.

Likewise, all my auto policies to the same thing.

I for one would not be happy if they did not make the offer. If I declined and went elsewhere it is not obvious if they will timely stop the direct debits, but that is another issue to the auto renewal offer.

A proportion of consumers, including myself, would consider this good service as many simply forget when cover or important contracts expire.

It is reasonable that you should have read the letter that came with the renewal offer and acted accordingly. That you did not, well Comminsure should simply let you walk away as a better business practice. However, in the end you do have some of the blame in my opinion.

[bc53]

And that is why I hate hate hate direct debit with a vengeance, imagine if you have it with lots of companies.
the reason the companies like this idea is because they get your money even when they're not entitled to it, they seem to continue making "mistakes" and take for ever to repay the money.

[Charliew]

Hi, Kadee. We used to check the original policy; it does not say the policy will continue unless you advise in writing before the anniversary date.

But there was not any signature on the policy. My wife said all documents she signed were kept by CBA branch staff. They did not give her any copies of the other documents. We just got 7-page policy and Product Disclosure Statement (PDS).

We are not sure if there are such words you mentioned in documents of which we do not have the copies.

If there is such a sentence on the policy, the staff of Comminsure would let us know during our complaint. If there is such a sentence on policy or PDS, and they pointed it out. If it is true, it's our duty. We'd never complain any more.

Well, they just mentioned we gave their direct debit authority before, and they just mentioned the trick clause on the new policy that we never requested accepted and signed, and they just mentioned paragraph of "Canceling your policy" on PDS which is about canceling a valid policy (a valid policy should be based on agreement between two parties).

For the new policy, it is without our agreement. We never requested, never signed it and never agreed it. It’s not our policy. Why should we cancel it?

This is just small amount of money, but it is really bad feeling. Australia is a country of no worries. We really don't want it turned into a country full of tricks and cheats. It is no good.

[kadee]

I assume you have a copy of the original policy you signed? Nowhere on there does it say the policy will continue unless you advise in writing before the anniversary date?

[Charliew]

We had 1-year Comminsure home insurance from Jan 2009. The insurance policy expired in January 2010. In early Jan 2010, Commsinsure sent us a new policy with higher premium.

Actually, we never requested the policy, because we already decided not to select Comminsure for its service quality, insurance covrage and higher price. Thus, we never signed the new policy and Direct Debit Authority form, and never returned them to Comminsure.

However, on 2 Feb 2010, the Comminsure deducted money from our CBA account. We found it on 6 Feb 2010, and we immediately called Comminsure to get our money back, but they said we must be charged for cancellation or administration fee. They did direct debit, because a clause was put in new policy – “If you do not wish to renew your policy, please notify us so we can cancel your current payment arrangements. Otherwise we will continue to debit your nominated account”.

They were playing a trick to retain customers instead of providing good products and services!

However, no matter what words Comminsure put in, things are very clear - we never requested a new policy, we never signed it, and therefore we never agreed with the tricky clause in the policy. There was no agreement between two parties about insurance renewal, and no further Direct Debit Authority to Commisure to continue direct debit from our CBA account from Feb 2010. The policy with higher premium is just unilaterally generated by Comminsure, without our request and agreement.

We asked them to show any evidence of our request for the second policy, or evidence of our agreement on their new policy and our authority of direct debit. They couldn’t, but they said we signed it last year. My god!

What we signed in 2009 were all about agreement of the past insurance purchase. OK, if it is still valid, why did Comminsure request us to sign a new policy and new Direct Debit Authority form, and return them asap? Because they clearly understand the second insurance policy was not based on an agreement and there is not direct debit authority after Jan 2010.

If Comminsure insists the new policy and direct debit is valid, please show any evidence of our agreement and authorization. Please don’t say it’s signed in 2009, or there is such a clause on policy. It is just a trick of Comminsure’s intention on its unilateral policy without our request and agreement.

We just want get wrongly debited money back. The policy is not ours. It was never requested agreed or signed by us. Why should we pay so-called cancellation fee or administration fee? We have no business and agreement with Comminsure since Feb 2010.

Comminsure can direct debit money from its previous insurance clients while no further authority has been given and while no agreement of insurance renewal has been reached. It’s no good to clients of CBA, since deposit security cannot be 100% guaranteed.

That’s our story. We’ll see how things are going on.