In the busy world that we all live, it is sometimes difficult to find the time to keep track of our finances. Many of us now only receive paperless bills which means logging on to look at bank statements and bills.
We also put a huge amount of trust in companies, so that when we provide them with our bank details to set up a direct debit, we assume that the right amount will be taken out each month and that when we cancel a policy or contract no further payments will be taken from our bank account.
In a perfect world this would be the case, but unfortunately mistakes do happen as was recently highlighted to me by a constituent who has inadvertently been paying for car insurance they cancelled two years ago.
In March 2013 my constituent insured their car for 12 months with a provider. Twelve months later she switched to keep her premium down and changed to another insurance company, she did so again this March. Imagine her surprise on checking her bank statement last month to see that a payment of £180.53 had been taken from her account by the insurance provider she was with back in 2013.
On further investigation she found out that the company had also taken a payment from their account of £166.14 in 2014. Which had gone unnoticed by my constituent who was undergoing treatment for cancer at the time. When she checked with the insurance company she was advised that her policy had been set up on an 'auto-renewal' basis and that the extra amounts were for her 2014 and 2015 premiums and that reimbursement would not be made unless proof that alternative premiums with other providers had been purchased.
Thousands of people across Wales are caught out by this sort of sharp practice by insurance providers each year, leaving them hundreds of pounds out of pocket and paying for cover they don't need or have already purchased elsewhere.
In these tough economic times, shopping around for the best deals on everything, including insurance policies, can save people hundreds each year and the annual hunt for a cheaper premium has become the norm for many households. But in a bid to stem the tide of losing business to competitors it would appear that a number of insurance companies are resorting to practices which are deliberately designed to catch people out in this way.
Whilst a few hundred pounds may not be a huge sum to a large financial institution, it is for many people in North Wales and beyond, especially those with fixed incomes, such as pensioners.
I am confident that my constituent will eventually see her cash returned, but she should not have to be chasing it in this way and certainly wouldn't be if 'auto-renewals' were banned.
It's time for the insurance sector to put an end to this practice and I for one will be lobbying hard to see that, but in the meantime we must be vigilant to check our bank and credit card statements for any unexpected charges and be extra vigilant to protect our hard earned cash.