Questions Of Cash: Costly mix-up over car loan and insurance

Q. I took out private car insurance with Sureterm Direct in April for a car that we had looked at on the internet, arranging insurance to drive it home. When we went to collect the vehicle it was not as described, so we declined to buy it. Sureterm had also arranged finance with Close Premium Finance. We cancelled the insurance and purchased another vehicle two weeks later. Sureterm again arranged the insurance and advised that a new direct debit would be arranged. Close Premium Finance attempted to apply the direct debit on 16 May, but the direct debit had been cancelled along with the insurance – we presume by the broker, as we had not done this. I received a letter from Close on 19 May, stating that no payment had been received. It said that unless a payment was made by 3 June it would take further action.

Close imposed a charge of £40 for administration. I made a payment of £70.88 within the specified time, but I received a letter dated 17 June claiming the payment had not been received and giving me notice of termination and threatening that my insurance may also be cancelled. I phoned Close, which said I must contact the broker to resolve the matter.

Close accepted that the payment they had requested for £70.88 had been received, but then said the administration fee was imposed because the initial agreement had been terminated. Sureterm were very helpful and said that Close had imposed the charge because the payment had not been made on time. Sureterm also said that a new direct debit mandate would have to be sent out for me to complete, but I have not received this. I have also been charged a cancellation fee by Sureterm of £50, even though I took another policy out with them. DE, Liverpool.

A. Sureterm Direct – a division of Capita – says that the initial insurance policy was never cancelled, but was actually kept in place and the vehicle details changed to those of the car you eventually purchased. The £50 charge was the fee for the change of vehicle details. This was cheaper than cancelling the policy and taking out a new one. Sureterm says that it did not cancel the direct debit and that Close told it that it also did not cancel the arrangement. Both had assumed that the direct debit was cancelled by the bank on your instruction. Your payment of £70.88 was received by Close on 4 June – the day after the deadline it had specified. Sureterm has now reinstated the direct debit, so that future payments can be collected. As a result, there is no need for you to complete another direct debit authorisation. As a gesture of goodwill, Close will refund you its £40 charge. Close declined to discuss your case directly with us, citing client confidentiality – even though we were explicitly acting on your behalf.

Q. My flight from Belfast to Birmingham in April was cancelled by Flybe because of volcanic ash. I chose to return home by other means and requested a refund for the return flight. I was told it could take 28 days to process the refund. But I have not had the refund. FM, Birmingham.

A. Soon after you contacted us Flybe repaid you £47.23. However, you had paid £146.96 for the return journey and wanted to know why you had not received much less than half the cost of the return flight. Flybe explains that the two legs of the journey had been priced differently and the £47.23 represents the amount you paid for the Belfast to Birmingham flight, including taxes.

Q. I booked a flight with Virgin Atlantic to fly on 26 March. Unfortunately, due to ill health I had to cancel it, and informed Virgin Atlantic immediately. It promptly refunded the tax, but I need to make a claim for the refund of the flight costs to my insurer, which requires cancellation invoices. I received the necessary cancellation invoice from my tour company in Jodphur by post in nine days, but I am still waiting on this from Virgin, despite many emails and two letters: phoning is pointless as no one can help. Eventually, three weeks ago, I received an email asking for proof of identity and flight details. I sent this immediately by post and a week or so later emailed a copy. But still I have not had a reply. I have received payment from my insurer for the tour, but it will not pay the £600 or so for the flights without the invoice. JW, Leicestershire.

A. Virgin Atlantic apologises, explaining that the volume of refund requests caused by the volcanic ash disruptions has created an administrative backlog. It has taken on more staff to handle these inquiries and has now sent you the invoice paperwork to enable you to submit the balance of your insurance claim.

Q. I read your recent warning (Questions of Cash, 12 June) about fraudulent payments that banks are rejecting responsibility for. My wife and I are concerned at two unexplained debits on my wife's account with Barclaycard. The charges are quite trivial, but we worry that this may lead to future more significant unauthorised transactions. The first transaction was on 21 February, with Waitrose in Chichester for £8.63. My wife was not in Chichester on that date and has never been to that shop. The second was charged against my supplementary card on the same account on 14 April for £14.95, with a payment to Rewardsfirst. I have never had any dealings with Rewardsfirst. I have written five letters to Barclaycard at their head office. One letter of reply refers to an account with a completely different number that is nothing to do with us. CB, Hampshire.

A. Barclaycard has now made a full refund. It has also provided you and your wife with some personal fraud advice and provided a direct line number in case of further fraudulent activity on the account.

Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: questionsofcash@ independent.co.uk