/ Money

We’ve just launched a campaign to stop sneaky fees

Sneaky fees illustration

Today we launch a new campaign to Stop Sneaky Fees and Charges as our latest research reveals that admin and cancellation fees are on the rise among car insurers.

Is it me, or does £35 seem a bit steep to make a simple administrative change to your insurance policy, such as changing your name or number plate?

Our new research has shown that while premiums have been failing, nearly half of the 28 car insurance providers we looked at have increased administration or cancellation fees since our previous survey.

Costs of cancelling your car insurance

We found that six companies – Churchill, LV, More Than, Nationwide, Privilege and Saga – have increased fees to make changes to a policy by at least half, such as getting married, changing job or moving home.

The most expensive fee we found for an adjustment to your policy was from Hastings Direct, which charges £35 for some changes.

Fees for cancelling your policy tend to be even more. Endsleigh had the highest cancellation fee of the providers we surveyed – a costly £75 to leave your contract early. This was triple the amount that they charged when we investigated this three years ago.

We agree with the two-thirds of you that think companies can use separate fees or charges to trick us into thinking the total cost is cheaper than it really is.

Tricked by the true cost?

That’s why today we’re launching a new campaign to Stop Sneaky Fees and Charges – not just in the insurance industry, but across all types of financial products like credit cards, overdrafts and mortgages too.

We’ve got three simple asks for companies: don’t hide the full cost from customers; stop making it hard to compare prices; and stop stinging customers with rip off additional charges

We think additional charges like insurance admin fees should be just that, a fee to recover the admin costs of making a change to a policy. We don’t see why they should charge you any more than what it costs them

We’re also calling for the Government and regulator to conduct a thorough review of fees and charges to put a stop to sneaky and unfair charges. If you agree, sign our petition.

Have you been stung by fees when making simple changes to your insurance policies?

Robintherich says:
26 July 2014

Under the subject of sneaky fees I wonder how many mobile phone users are aware that all mobile phone network operators I have researched have abandoned “per second” charges and replaced them with “per minute” charges. I am a relatively light user and most of my calls were of very short duration so “per second” charging suited me very well, but now with the new charging regime my costs have rocketed and my last bill showed charges of about £1.30 per minute of usage. Its the same with PAYG whereby your minutes allowances are used up much mor quickly than before.
Does anyone know of a network which charges by the second rather than per minute?

Yes I noticed this recently when I needed to interrogate my call history. I am a light user on PAYG and I don’t keep much of a look-out for tariff changes – nowadays I don’t bother to read the various text messages that come through because when I did they seemed to be mostly irrelevant. I shouldn’t be surprised if this call charge adjustment was done in a sneaky manner, after all there is no particular reason for it – with digital technology airtime [which is what we’re paying for] can be measured to within a fraction of a millisecond so with grossing up to a full minute the operator is recovering an excessive amount for service and network costs. Obviously, this marginal overcharge only applies during the final minute of each call but it must be 100% profit.

When I renewed my car insurance by phone in 2011, I said that I would be retiring two months later. I was asked to inform them when this occurred and when I did so, was told that there would be a charge for correcting my details. We had a polite discussion and the charge was waived.

We have won the battle regarding unreasonable surcharges for card payments and I hope we can win this one too.

Chris Donegan says:
13 August 2014

Are Trainline’s Credit card fees legal or just extortionate. Takes a lot to make Ryanair look reasonable but just paid £13+ . How can this be justified?

I believe firms can legitimately charge up to 2.5% of the transaction value for processing a credit card payment [there has been a Which? Conversation on this but I cannot find it quickly in the index so my statement of the percentage might not be quite correct]. In most over-the-counter retail extablishments this is incorporated in the overall pricing structure but for on-line purchases it can often come as an impost. It seems to be fairly common in the travel trade [I don’t know why especially]. There are alternative train ticket agents who do not charge a credit card fee [for example, redspottedhanky.com]. Buying tickets direct from the train operating company is widely recommended – so far as I know none of them charge a fee and the tickets arrive the next day by first class post. They can do this because they are not paying commission to an agent like The Trainline [who are making money on both sides of the transaction].

From the introduction to an earlier Conversation:

“According to the government’s new rules, surcharges must reflect the cost incurred to the firm for processing the payment. We estimate this to be no more than 50p per transaction for debit card payments, or 2% of the total transaction price for credit card payments.”


It would be good to know exactly what the rules are so that we can deal with any organisation that is a bit greedy.

Paul Roberts says:
29 September 2014

Just been ripped off by churchill insurance at a staggering cost of £39 just for changing address half a mile from previous address . Avoid Churchill or pay hidden costs!!!!!!!!!!

Dave says:
28 October 2014

I have had a similar issue and have contacted the BBC ‘Rip off Britain’ team in the forlorn hope that they might help.

I think I will join Twitter and squawk about it on there.


Gemma says:
17 November 2014

£47.50 to cancel my Privilege car insurance policy (I paid annualy so whilst I get £60 back this fee hardly seems fair). Apparently its for ‘administration’. When asked her to justify the fee I was told its in the small print and thats that. Hardly fair when its all computerised and she just clicked a button. Banks had to justify fees of this nature. Why are other companies still getting away with it!

I think there can be a line at where insurance companies can charge “admin” charges to a policy change during the year and where they must be forbidden to. Many insurances are optional, some more than others, but Motor insurance is obligatory. Therefore the industry has got its customer at the start of the insurance year as we have to take out insurance.

It is totally unfair as we obliged to tell the insurers of changes, that they then charge major charges as admin ontop of any adjustment to the risk level (like moving from Harrogate to Bradford). This is even more like the insurer spitting in the customers’ faces as all they have to do to generate the change is hit a few computer buttons and the only real cost (if that) is the paper, envelope and postal charges.

The only insurer that I can speak highly of is Tesco motor insurers. Not only did they not charge any admin, they also did not charge for the higher change of use risk (something like £70). They said they just wrote off the costs as they much preferred to know about the changes and keep us insured.

think insurance are trying to charge us over £500 to change the policy over to a newer car for my 18 year old, she originally had a 1997 corsa 1.2 we brought her a suzuki alto 1.1 2005 yesterday called to change insurance over and they told us we had to pay over £500 surely this cant be right?

Might it be partly because the replacement value of a 2005 car is considerably higher than that for a 1997 model? I suspect there are other factors behind the higher premium; the admin charge for the change of vehicle should not account for much though, surely.