SC writes: Last October, we rented a villa in southwest Florida. As Hurricane Wilma approached, we were advised by the agents to evacuate the premises and to move north and inland. We took their advice and moved to a hotel in Orlando, where there were many British Wilma evacuees. On my return, I contacted my insurers, National Westminster Gold Card Services, who advised me I was not covered for this eventuality. Perversely, I was told that if I had stayed in the villa, and suffered injury and possibly much greater losses, I would have been covered. My claim is not huge — a few hundred dollars at most. But this seems a very strange state of affairs.
I quite agree. On any common- sense assessment of the matter, one would have thought you would have been covered, but it may be that the terms of the policy did not precisely cover this scenario (though with the increasing frequency of hurricanes, perhaps they ought to). In any case, NatWest has now had a second look at your case, and has apologised for “misunderstandings” during your initial telephone call. It has now invited you to submit your claim and has said it will be honoured.
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Barclays refuses to limit risk of fraud
SL writes: On October 29 last year I received a call from Barclays regarding a suspected fraud on my account. A total of £4,000 had been withdrawn the day before; that day, yet more withdrawals — 70 in total — were made, each for £40. I reported the matter to the police but am concerned that Barclays’ operation is not secure. I had to take half a day off work to try to sort this out, and was unable to access my funds for a week. I have repeatedly asked Barclays to close my account if money is taken out over my overdraft limit of £1,500, but it says it cannot do this.
Your money has now been refunded in full, though the bank initially managed to miss one payment of £40. It is also crediting your account with £150 compensation. But your request that an automatic stop be put on your account if it exceeds your overdraft limit was turned down. The bank said: “We seek to achieve a sensible balance between providing a payment service to customers and minimising the risk of fraud.”
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Left in the cold by Staywarm muddle
IW writes: I am writing on behalf of my mother, who is elderly and frail. Three years ago she signed up to the Staywarm Scheme run by TXU Energi, which was later taken over by Powergen. The company failed to activate her direct debit for many months, even though she kept phoning with reminders; being on a limited budget, she was anxious not to get behind with payments. Each time she was reassured it was in hand, but nothing happened for about 10 months. In August 2003 the company acknowledged it had failed to collect payments, and she asked for her direct debit to be increased to spread the repayment of the backlog, which was apparently agreed. But last summer she suddenly received a letter demanding she pay £381.80 immediately, or she would be removed from the Staywarm scheme. This caused her much distress and anxiety. I told the company I would immediately pay what I thought was owing, but pointed out that it appeared to have overcharged by £120.
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At many stages during this story, your mother’s phone calls and your e-mails and letters were ignored. Almost a week after I contacted the company it came back to me asking if I had another phone number for you, as it was unable to make contact with the one I had supplied. I did not have an alternative number but I always try the number myself if this happens, and — surprise, surprise — got through to you immediately. Either the customer-services people are extremely unlucky in the times they choose to phone, or perhaps they don’t try very hard. And so I learnt that your original letter to me, which you copied to Powergen customer services, had finally elicited a competent and understanding response. The company maintained that the £120 was correctly charged, but in view of the problems you and your mother have had, it is waiving the debt. You are satisfied with this.
Insurance charged on a cancelled card
AC writes: I signed up for a Sunday Times Visa card some years ago, and used it regularly. It was eventually replaced by a Bank of Scotland card, and the interest rate became less competitive. I switched to another card and two years ago closed the account. Then a couple of weeks ago I received a call in the late evening from a debt-collection agency, saying I owed money on the card and demanding immediate payment. It emerged that my insurance policy with Credit Card Protection had continued to run, although my understanding was that it was for a three-year term only. Because I no longer had the card, the bank had never sent me a statement, so I was unaware this sum had been charged.
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You did the really hard work on this problem yourself, finally convincing Bank of Scotland that you did not owe this money, and persuading it to wipe out the charge and accumulated interest — an achievement that involved spending many minutes listening to muzak as you were bounced to and fro between the collection agency and the bank. And then you got another call from the agency saying you still owed the money; not surprisingly, at this stage you lost confidence in the lot of them.
The bank has now written to you to say that it will definitely not be seeking repayment and to apologise for the mix-up.
Compensation for with-profits losses
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DG writes: Like some of your previous correspondents, I was advised to buy a with-profits bond by Bradford & Bingley in 2000. I was told there would be an early cash-in charge during the first five years, but I have now been told that a “market value adjustment” will apply if I cash in now. I had thought these were five-year bonds and I expected to be able to access my money, penalty-free, at the end of the term.
You have already complained to the firm and requested compensation, but it turned you down. Having had a long chat with you, I felt there were good grounds for the company to look at your situation again, and sent it a long memo explaining why it should do so. Somewhat to my disappointment, it turned you down again.
At this stage, you took matters into your own hands, and called the company. I am delighted to hear that this time you succeeded in convincing B&B that you were indeed mis-sold the bond, and the firm has agreed to pay compensation of approximately £10,000.
Whether someone is awarded compensation must seem, on a superficial level, nothing more than a lottery: some people win while others, whose investments have performed more or less identically, lose. The principle on which compensation is awarded has nothing to do with whether the investment performance, in itself, is good, bad or indifferent. What has to be demonstrated is that the investment was mis-sold — meaning that it was inappropriate for the individual concerned at the outset, bearing in mind their financial circumstances, and whether the nature of the product (and its risks) were properly explained and documented. This is very much a value judgment.
PS On October 30, I published a letter from BR, whose 65th birthday fell on a Tuesday. He felt he had in effect “lost” six days of state pension, because it becomes payable (in advance) from the Monday following the relevant birthday of the individual in question — 65 for men and 60 for women. Several readers have written in pointing out that, because they have elected to take the pension monthly, they appear to be getting paid in arrears — and so may lose out even more. Not so, says the Department for Work and Pensions: people who opt for payment on a four-weekly basis are being paid one week in advance plus three weeks in arrears, “so the four-weekly-paid customer will receive exactly the same benefit as the weekly-paid customer”.
E-mail Diana Wright at questionofmoney@sunday-times.co.uk or write to A Question of Money, The Sunday Times, 1 Pennington Street, London E98 1ST, giving a daytime telephone number. We cannot send personal replies or deal with every letter. Please do not send original documents or SAEs. Advice is offered without legal responsibility.