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Questions Of Cash: Ombudsman forces AIG to pay for missed flight

Q. I want to thank you for advising us to go to the Financial Ombudsman Service to complain about the rejection of our insurance claim (Questions of Cash, 14 February 2009). As a result, we are being paid £490 compensation. FR, Derbyshire.

A. You went on holiday to Sark last August, flying to Guernsey by Flybe. Severe weather conditions caused your ferry from Sark to Guernsey to be cancelled, meaning you missed your return flight to Manchester. You believed that your travel insurance policy, sold to you by your airline, Flybe, would compensate you for the extra costs of an additional night's accommodation and later flights home. You paid £734.84 for the new flights, plus £200 for another night at the hotel. But the insurance underwriters, AIG, met only part of your claim. When we investigated this on your behalf, we were told that travel within the UK was not covered by the policy. We explained that Sark and Guernsey are not part of the UK. But a spokesman for the insurers said that the policy treats the Channel Islands as part of the UK. We regarded this as an unreasonable condition. AIG refused to concede our argument, so we advised you to lodge a complaint with the Financial Ombudsman Service. The ombudsman has now reached a decision. While he does not accept the point about the Channel Islands being recognised as being outside the UK, he has concluded that the details within AIG's terms and conditions were inconsistent. You have therefore been awarded an extra £490 in compensation, in addition to the £360 you were previously offered.

Q. In April, my company paid my expenses bill of £468.87 into my Lloyds MasterCard account in error. I had closed this account in favour of an Airmiles Duo MasterCard account. When I noticed the mistake, I contacted Lloyds to ask for the payment to be transferred to the correct account. As I pay off my card bill every month, the balance has effectively been paid twice, with a credit balance shown on the old account. I have asked Lloyds to make the transfer on five occasions without success. Lloyds said there was a technical computer problem. It has written again, without explaining what the problem is, does not say when the transfer will be made and offers me no compensation for tying up my money for months. SA, Nottinghamshire.

A. You have been given a wrong explanation. The payment was rejected because you had closed the account. Lloyds moved the funds into a suspense account. Lloyds has now transferred the funds into your Duo account. It has also credited the account with £35 as a gesture of goodwill, in addition to £15 it previously sent you to pay for your phone calls

Q. My daughter has been in dispute with Trinity Estates, her leaseholder, for 18 months over service charges. She has now been threatened by Trinity with legal action. She doesn't dispute that there is a problem, but wants an explanation of the claim that she owes them £171.33. Trinity states that it is not aware that the amount is in dispute, yet they have been in constant dispute since February. The amount Trinity states as owed has changed repeatedly: £252.54, £658.48, £706.12, £877.45, £600.07, £771.40 and now £171.33. The difficulties arose because Trinity changed its bank account number for payments in March without giving my daughter time to alter the payment instruction – and then put her account into arrears. RC, Ilkley.

A. A spokesman for Trinity responds: "It would appear that we had technical problems with the original account when it was established, which meant that we had to close it and reopen a new account. We wrote to [the reader's daughter] in March to explain this and the various adjustments that we had made to her account and as a gesture of goodwill credited her account with £76. Unfortunately, it appears that the staff at Trinity who were subsequently contacted did not have a full understanding of the issues relating to this account and so it appears that we have failed to effectively answer her queries. We are very sorry for the confusion that has been caused."

We requested that Trinity provide a full written statement to explain how it arrived at the balance shown and why the amount changed repeatedly. This explanation has now been sent to her. According to this statement, the sums varied when payments were made by your daughter, and new charges arose – including a deficit on the account for the year ending October 2008. There was a small surplus on the service charge account for the year ending October 2007. Service charges on leasehold properties frequently lead to disputes and management companies need to explain the charges clearly and provide statements of account. Trinity accepts it "did not effectively deal with your [daughter's] queries".

Q. I had an account for some years with U-Net for internet access. I paid annually in advance by credit card. I moved house in late 2005 and forgot to cancel the account. In November 2006 I received a letter from U-Net demanding payment for £141. I established that the account had remained open for three months, so sent a cheque to cover. Now, almost three years later I have received a demand from a debt collection agency for the remaining £105.75 – for a service I never received. DC, York.

A. Clara-net, which now owns U-Net, says that it wrote to you in November 2006 requesting proof that you had cancelled your account so that it would be able to write-off the remainder of the balance shown as due. It says it did not receive a response.

However, as a goodwill gesture, it has agreed to now write this off; it is i nstructing the debt collection agency to close its file; and has confirmed that there will not be any related adverse entry on your credit status.

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