I wanted to draw your, and your readers’, attention to something I think is extremely sharp practice by the insurance broker Collingwood.

I bought its annual learner driver policy for my son last year for £256.

Collingwood was clear that once he passed his driving test the policy would cease to be valid, which I understood.

In fact, it took my son almost the whole year before he passed, with only a few weeks of the policy left to run.

I was content to let it expire, in the knowledge that no partial refund would be due.

I was then very surprised to receive an email informing me that, since my son had passed his test, I now owed Collingwood a £40 “cancellation fee”.

I knew, in practice, no claim could now be made on it. I had paid the full premium upfront and owed nothing further.

Collingwood’s position is that the charge is included in its Ts and Cs, which I ticked when I bought the policy, and so is legitimate.

I see from different review websites that many people have been affected by this and are complaining they feel ripped off. I appreciate that cancellation fees may be appropriate when the consumer no longer wants the product, but charging £40 to basically allow a policy to lapse does not seem at all reasonable.

ML, by email

I couldn’t agree more. The company is, in effect, selling a policy that it expects the vast majority of its buyers will have to cancel before the end of the term, and is failing to explicitly mention this charge upfront.

It is likely doing so to make the policy look cheaper than it actually is in web comparisons. In my view, it is a hidden charge – one, as you say, that is catching out a lot of people.

I asked Collingwood about it and it says it was still looking into your complaint, made more than a month ago.

“The fee and conditions of cancellation are clearly presented in the customer journey prior to purchase, and also require an acknowledgment that they have been understood and accepted, before any policy can be purchased,” it said.

“With reference to the amount of the fee charged, this has been set with consideration to fair value and the consumer duty.”

If everyone who finds themselves on the wrong end of this £40 charge takes the matter to the Financial Ombudsman, the company will soon put it upfront on its website, which is what it should do anyway. Other potential Collingwood policy buyers take note of this shoddy behaviour.

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