Authorisation to deduct car insurance renewal from credit card?

[Mr Badger]

TLDR: Can an insurance company take a renewal from a credit card not belonging to the insured without the permission of the card owner?


Person A is not an internet user and does not do online transactions. At the end of September 2019 they were complaining about the cost of their car insurance renewal.

Person B agreed to hit the price comparison websites for them and found a better deal. They paid for this on their credit card and Person A reimbursed them by cheque.

During the summer of 2020 Person A got rid of their car and believes they contacted the insurance company telling them not to renew, although they can't produce any evidence of this.

November 2020 Person B receives their credit card statement showing that the insurance company charged it for Person A's insurance renewal at the end of September 2020.

The insurance company has been contacted and has confirmed that the insurance is now cancelled and that a partial refund will be issued to person B, but seems non committal regarding the period from the end of September until now. If they decline to refund this (presumably on the grounds that Person A can't prove that they cancelled the renewal) is it right that the insurance company can take the money from Person B's credit card when they are not the insured and did not give permission for the insurance company to retain their credit card details or make this transaction?

 

[Temujin]

In the documentation sent to person A it would likely have said something about auto renewal and that the card on file would be charged, this would mean they definitely didn't cancel it.

AFAIK they don't need to go any further in obtaining permission to do so. Person A to blame imo, with a bit of B for not remembering to ask for their card to be removed from the policy.

 

[bainbridge]

Person B clearly didn't opt out of auto renewal, either when processing the transaction or by contacting the company afterwards to stop auto renewal.

 

[Semple]

My last two policies have both come with auto-renewal, with only an opt-out option rather than an opt-in.

If person A can't find an email/letter to confirm the insurance was cancelled, then it's likely they never did - perhaps forgot.

I would suggest person B seek reimbursement from person A.

 

[muon]

Just do a chargeback. Say you didn't authorise this payment, which you didn't. You'll win.

 

[savagesam117]

As above, the renewal letter would have said, you have to call to cancel the auto renewal.

 

[Nasher]

Auto-renew by default needs to be banned tbh. Especially when the only way to change it is phone them, which you often have to pay for.

 

[Sirrel Squirrel]

As above, auto-renewal is active by default so call them to cancel, if not do a charge back.

 

[tom_e]

Would a charge back work? The agreement to auto renew and charge the card would have been made when the original policy was taken out therefore I'm not sure how happy they'd be processing a charge back with the reason of not authorising the transaction.

 

[Sirrel Squirrel]

If it's on a credit card as the OP says I'd say yes, maybe not on a debit.

 

[muon]

Would a charge back work? The agreement to auto renew and charge the card would have been made when the original policy was taken out therefore I'm not sure how happy they'd be processing a charge back with the reason of not authorising the transaction.

It would work as the agreement to auto renew isn't with the card holder and they never got any letter.

They also have not permitted the actual policyholder to use the card for renewal. So actually if it hadn't been an innocent mistake, it is payment fraud.

I'm a little surprised the insurance could actually have been purchased in the first place by using the details of someone who isn't on the policy or even live at the same address. Doesn't sound like they have very good checks in place to protect against stolen credit cards.