AA violating the law

troyzer

Not sure if this saga belongs here or in motoring but here goes!

Up until September last year, I lived in Australia. I'm a 25 year old man and I came home for a job. I was used to the way banks work over there and my blood boiled at the prospect of paying silly money for crap banks in Ireland.

So I signed up for N26. For those of you who don't know, N26 is an online only German bank which offers sick deals on exchange rates etc.

In December last year I bought a car, the AA quote was the best (still €2,000 for third party on an old Yaris, crazy). I set it up for monthly but lo and behold, they wouldn't accept my German bank details.

The person on the phone said that due to it being a credit agreement, they couldn't accept a German IBAN.

1) How are they allowed to classify insurance as a credit agreement if they simply cut you off if you don't pay? I am paying monthly for something I'm using monthly. If they're allowed to charge interest, why aren't Netflix? Or Sky?

2) It shouldn't matter, under EU law I'm covered. Regulation 260/2012 Article nine says this:

"For a credit transfer to be executed, the payee’s payment
account must be reachable. Therefore, in order to
encourage the successful take-up of Union-wide credit
transfer and direct debit services, a reachability obligation
should be established across the Union. To improve
transparency, it is furthermore appropriate to consolidate
that obligation and the reachability obligation for direct
debits already established under Regulation (EC) No
924/2009 in a single act. All payee payment accounts
reachable for a national credit transfer should also be
reachable via a Union-wide credit transfer scheme. All
payers’ payment accounts reachable for a national
direct debit should also be reachable via a Union-wide
direct debit scheme. This should apply whether or not a
PSP decides to participate in a particular credit transfer or
direct debit scheme."

I contacted the CCPC who told me that this is illegal but that I need their rejection in writing. In the meantime, I paid the deposit using my card (somehow that's allowed?) and set up the direct debit using my Mam's account while sending her the money every month.

I rang the AA (this is still December) and asked for their policy in writing. It took several phone calls for them to understand what I was asking for and then said they can't do it. I managed to speak to a manager who said he'd chase it up and post me out a letter.

Fast forward six months and I never received the letter. At the time I was working in the North on a rostered basis paid into a Sterling account and transferred down south. So to be honest, my financial setup was so complicated as it was that I never followed up with the AA.

However, last month I took a new job working in the South full time and because my salary is now being mandated into that N26 account I thought I'd finally sort things out with the AA.

Rang them up, the woman on the other end said she doesn't know what happened with the letter but can see on my account that there's a note about the whole German account fiasco. She could see I requested for a policy statement in writing back in December and a clarification that the AA does not extend "credit" agreements with non Irish IBANs. I asked her could she send me the policy.

She said no, as it comes under GDPR (!!!!!!!!!!!!!). How?!??!?! I was asking for a COMPANY policy and she insists that it's personal data related to my account.

I played ball and asked her what email address to send an SAR to and she gave me the address. GDPR requires the AA to reply to me within 30 calendar days unless they can show it's a difficult request. Which it's not. I specified that I wanted just the notes on my account. It's a simple matter of ticking the boxes, CTRL+P and pop it in the post.

That was 24 calendar days ago as of the 2nd July. I never even received an acknowledgment of my request, nevermind what I wanted.

I really hope it goes over the 30 days now so they get hammered with fines. Then they'll give what I want and I'll be able to file ANOTHER complaint against them. Hopefully a few more fines. It's ridiculous.

What are people's thoughts? Have I done something wrong in my dealings so far? What's the likely outcome?

wench

troyzer wrote: »

The person on the phone said that due to it being a credit agreement, they couldn't accept a German IBAN.

1) How are they allowed to classify insurance as a credit agreement if they simply cut you off if you don't pay? I am paying monthly for something I'm using monthly. If they're allowed to charge interest, why aren't Netflix? Or Sky?

On this point, you have an annual policy, not a monthly one.

So they have insured you to next December, and by allowing you to pay monthly, are extending you credit in the meantime.

troyzer

wench wrote: »

On this point, you have an annual policy, not a monthly one.

So they have insured you to next December, and by allowing you to pay monthly, are extending you credit in the meantime.

But it's not an annual policy. Because if I stop paying they'll cancel my policy. In other words, I'm not able to access my insurance in November until I've paid for it in October.

Seriously, would this mean that Netflix could charge interest for an annual agreement? An annual agreement the AA are forcing me into by the way, I'd much rather pay monthly and be able to cancel with 30 days notice. I've got itchy feet and I have emigrated on short term notice before.

amcalester

Of course it's a credit agreement, you're paying interest on it.

The AA covers the cost of the annual insurance up front and then charges you interest on the loan.

If you stop paying the policy is cancelled, it doesn't expire which is what would happen if it was a monthly policy.

wexie

troyzer wrote: »

But it's not an annual policy. Because if I stop paying they'll cancel my policy. In other words, I'm not able to access my insurance in November until I've paid for it in October.

Yes it is, they're not selling you a months worth of insurance at a time, the policy is for a year. They are just allowing you (as a courtesy) to pay for it in monthly installments. The reason it can be canceled (by them) is you not sticking to the credit agreement allowing you to pay for your yearly policy on a monthly basis.

What did your insurance disc say when you got it? Was it for a year? If it was on a monthly basis how come you don't get a new disc every month?

wench

You agree to pay netflix 9.99 a month on a rolling contract.
You agree to pay AA 2000 per year, in monthly installments.

It is not the same thing at all

troyzer

But again, it's not for a year. It's only as far as I pay it. Like Netflix. The AA "covering" my insurance and charging interest makes no sense because again, they'll only honour the agreement as long as I'm paying for it. They're completely secure, there's no risk on their part because I'm effectively paying as I go. A credit agreement implies some sort of "I'll give you money so you can go off and get that thing and then pay me back later" not "You give me money, I'll call it lending money to you in exchange for a service which I'll cancel as soon as you stop paying". How is this a loan?

I'm not disputing that they charge interest and call it a yearly agreement. I'm disputing the reason why they're allowed to do it. It's not really annual coverage if you're paying for it monthly and are cut off if you stop paying it.

The issue seems to be charging interest for the monthly payments as part of a contract. So let's pick a better one, Sky TV.

As far as I know you commit to a contract and pay monthly, why don't they charge interest? Or do they?

In any case, we're getting away from the topic and the law is clear that they still have to accept my IBAN.

troyzer

wench wrote: »

You agree to pay netflix 9.99 a month on a rolling contract.
You agree to pay AA 2000 per year, in monthly installments.

It is not the same thing at all

Would there be anything stopping Netflix from doing exactly the same thing if they wanted to?

Wheety

I don't understand how she brought up GDPR. Companies really don't have a clue and can see a lot of them just throwing this out.

amcalester

troyzer wrote: »

But again, it's not for a year. It's only as far as I pay it. Like Netflix. The AA "covering" my insurance and charging interest makes no sense because again, they'll only honour the agreement as long as I'm paying for it. They're completely secure, there's no risk on their part because I'm effectively paying as I go. A credit agreement implies some sort of "I'll give you money so you can go off and get that thing and then pay me back later" not "You give me money, I'll call it lending money to you in exchange for a service which I'll cancel as soon as you stop paying". How is this a loan?

I'm not disputing that they charge interest and call it a yearly agreement. I'm disputing the reason why they're allowed to do it. It's not really annual coverage if you're paying for it monthly and are cut off if you stop paying it.

The issue seems to be charging interest for the monthly payments as part of a contract. So let's pick a better one, Sky TV.

As far as I know you commit to a contract and pay monthly, why don't they charge interest? Or do they?

In any case, we're getting away from the topic and the law is clear that they still have to accept my IBAN.

You don't understand how insurance companies operate or the difference between providing insurance and providing a service.

All that's going to happen here is that you'll get yourself worked up, spend a lot of time and effort trying to prove that the AA are acting illegally and in the end nothing will change.

You may get a Gesture of Goodwill designed to get rid of you but you won't force them into accepting your non-Irish bank account for direct debits.

troyzer

Again though, I want to get away from this. I'm not really arguing that it's a credit agreement, I'm just irritated at the fact that they're allowed to classify it as one when I'd much rather pay monthly for monthly coverage even if that did mean I'd have to print out a new disc every month.

This snip is from Aviva in 2014 highlighting the upcoming changes to Aviva insurance customers following the implementation of SEPA. It's pretty clear I'm right on this and the AA are being dicks.

So I will get them to accept my account in the end, I'm more curious about what'll happen when they seemingly inevitably miss the GDPR deadline.

troyzer

amcalester wrote: »

You don't understand how insurance companies operate or the difference between providing insurance and providing a service.

All that's going to happen here is that you'll get yourself worked up, spend a lot of time and effort trying to prove that the AA are acting illegally and in the end nothing will change.

You may get a Gesture of Goodwill designed to get rid of you but you won't force them into accepting your non-Irish bank account for direct debits.

I can't, but the Central Bank can.

Clearly I don't understand the difference between insurance and services. Because it's beyond me why I can't pay monthly for a monthly service.

wexie

troyzer wrote: »

I can't, but the Central Bank can.

Clearly I don't understand the difference between insurance and services. Because it's beyond me why I can't pay monthly for a monthly service.

You're not getting a monthly service and you are paying for it on a monthly basis, due to the credit agreement you have with the AA.

Insurance just isn't sold on a monthly basis (least not car insurance)

troyzer

wexie wrote: »

You're not getting a monthly service and you are paying for it on a monthly basis, due to the credit agreement you have with the AA.

Insurance just isn't sold on a monthly basis (least not car insurance)

But why are insurance companies allowed to force you to buy it on an annual basis and why don't ISPs and TV providers do the same?

By the way, my car insurance was on a monthly basis in Australia. Which is partially why I'm so stubborn on this issue. It's clearly possible, there's just no incentive for the insurance companies to offer it. It's just another facet to the general problem of lack of competition in Ireland.

TheChizler

The issue of credit being extended aside, just assuming it is for now, is there a law that says that they can't accept non-Irish banks for making direct debit payments against a credit agreement?

wexie

troyzer wrote: »

But why are insurance companies allowed to force you to buy it on an annual basis and why don't ISPs and TV providers do the same?

Who knows, I'd imagine the argument would be that the admin costs would make it prohibitively expensive to sell on a monthly basis (and yes I full appreciate the irony in that).

There's nothing to stop Netflix and Sky from doing the same I'd imagine. But it's a different business and different business model so they've probably decided it's not really worth it.

It may well be possible for insurance companies to sell monthly policies but I don't know how many people would take them to be honest. It's a pain the proverbials as it is.

I'd fully agree with you in saying I wouldn't mind the insurance market being looked into very thoroughly to see what can be improved for the consumer but there are many things (imo) that would need to be tackled before this one.

(oh and by the way some ISP's do actually insist on a yearly contract, but then allow you do pay for it monthly. I'd imagine what's different is that you're paying the company actually providing the service, whereas in your situation you are paying AA but AA (I think) aren't actually the underwriters of the policy so what's happening is that you're getting a policy for a year from a different company, through AA. In this case AA will have paid for this policy in advance)

EDIT : see here for the list of underwriters for AA, these are the companies actually providing the insurance that you got through AA.)

troyzer

TheChizler wrote: »

The issue of credit being extended aside, just assuming it is for now, is there a law that says that they can't accept non-Irish banks for making direct debit payments against a credit agreement?

I have no idea but the law is clear that they have to accept my account for direct debits. I can't find anything in law that allows them to make a distinction between a direct debit for a loan or a direct debit for hardcore tranny porn.

It could be that the direct debit is less important than the fact that they refuse to extend "credit" to a non Irish person. Which clearly doesn't apply here because I am registered as here in Ireland. It's strange though that they were allowing my mother's bank account to be the nominated account on a credit agreement without her giving her express consent to anything, other than to me of course. Does that make her the debtor?

Del2005

troyzer wrote: »

But why are insurance companies allowed to force you to buy it on an annual basis and why don't ISPs and TV providers do the same?

By the way, my car insurance was on a monthly basis in Australia. Which is partially why I'm so stubborn on this issue. It's clearly possible, there's just no incentive for the insurance companies to offer it. It's just another facet to the general problem of lack of competition in Ireland.

They force you to take out an annual policy because it's mandatory to have insurance. TV companies and ISP also tie you into an annual, or more recently 18 to 24 month, contracts that you pay monthly for.

The rego in Australia is the equivalent of our insurance and that's annual. You were paying for extra insurance in installments.

troyzer

wexie wrote: »

Who knows, I'd imagine the argument would be that the admin costs would make it prohibitively expensive to sell on a monthly basis (and yes I full appreciate the irony in that).

There's nothing to stop Netflix and Sky from doing the same I'd imagine. But it's a different business and different business model so they've probably decided it's not really worth it.

It may well be possible for insurance companies to sell monthly policies but I don't know how many people would take them to be honest. It's a pain the proverbials as it is.

I'd fully agree with you in saying I wouldn't mind the insurance market being looked into very thoroughly to see what can be improved for the consumer but there are many things (imo) that would need to be tackled before this one.

(oh and by the way some ISP's do actually insist on a yearly contract, but then allow you do pay for it monthly. I'd imagine what's different is that you're paying the company actually providing the service, whereas in your situation you are paying AA but AA (I think) aren't actually the underwriters of the policy so what's happening is that you're getting a policy for a year from a different company, through AA. In this case AA will have paid for this policy in advance)

EDIT : see here for the list of underwriters for AA, these are the companies actually providing the insurance that you got through AA.)

I never considered the fact they're not under writing it. That must be the rub ultimately then. It wasn't complicated in Australia at all.

troyzer

Del2005 wrote: »

They force you to take out an annual policy because it's mandatory to have insurance. TV companies and ISP also tie you into an annual, or more recently 18 to 24 month, contracts that you pay monthly for.

The rego in Australia is the equivalent of our insurance and that's annual. You were paying for extra insurance in installments.

The Rego isn't annual. I was paying every six months, similar to Irish road tax. But yes, my insurance was extra. I fail to see why that should make a difference.

Which is another thing, it's mandatory to pay road tax in Ireland but they don't force you to buy it annually. All you're required to have at all times is to have third party insurance and Tax and NCT compliance. I don't see any obvious reason why you would be required to have annual coverage as a result.

troyzer

By the way, this isn't going to be a problem going forward. I'll just pay annually, although probably not with the AA.

wexie

troyzer wrote: »

I don't see any obvious reason why you would be required to have annual coverage as a result.

You're not required to have annual coverage. It's just the only way to get it.

Seriously I wouldn't get too hungup on whether or not the car insurance market in this country makes any sense, or is fair or sensible.

You'll drive yourself nuts.

Grassey

troyzer wrote: »

another thing, it's mandatory to pay road tax in Ireland but they don't force you to buy it annually.

Sounds like you've been scammed since you've moved back, we don't have road tax here.

troyzer

Grassey wrote: »

Sounds like you've been scammed since you've moved back, we don't have road tax here.

What do they call it? Motor tax?

You're not required to have annual coverage. It's just the only way to get it.

Seriously I wouldn't get too hungup on whether or not the car insurance market in this country makes any sense, or is fair or sensible.

You'll drive yourself nuts.

This is true. Are you eligible for a refund if you cancel early? Obviously I'm due for renewal in December but I'm considering another move abroad next year. Seeing as how I'm paying a ridiculous amount in insurance, it seems fairly harsh to choose between using a car or forfeiting over a grand because I've left the country.

Also, what's going to be the craic with GDPR?

Fol20

Company’s are very slow to change. How about you save yourself all the Agro and open and Irish bank account.other company’s still don’t allow eu banks either(for now).ebs have a free bank account you could open. Services are terrible and what you could do is send x amount from n26 to ebs so you can pay for all your dd

troyzer

Fol20 wrote: »

Company’s are very slow to change. How about you save yourself all the Afro and open and Irish bank account.other company’s still don’t allow eu. Asks either(for now).ebs have a free bank account you could open. Services are terrible and what you could do is send x amount from n26 to ebs so you can pay for all your dd

I could do that but to be honest, I'm spoiling for a fight with the AA at this point. They're the only ones I've had an issue with and I refuse to open up a brand new bank account just to cater for their incompetence and illegality.

wexie

troyzer wrote: »

This is true. Are you eligible for a refund if you cancel early?

Yes, you get a pro rata refund when you cancel insurance, need to send the disc back.

troyzer wrote: »

Also, what's going to be the craic with GDPR?

I don't know to be honest, I get the impression that a lot of companies are struggling with the whole GDPR thing and are frantically trying to figure out what they can and can't do. If I had to guess what's going on in AA is that they've given out very strict guidelines to the front line staff for fear of falling foul of GDPR and are probably overwhelmed with requests, exceptions etc. etc.

While it's probably not right to have to do it I'd second the advice of just saving yourself the grief and getting an Irish account.

Or just get the hell out of the country, mind I'm sure other countries have different idiosyncrasies you'd need to put up with.

wexie

troyzer wrote: »

I could do that but to be honest, I'm spoiling for a fight with the AA at this point. They're the only ones I've had an issue with and I refuse to open up a brand new bank account just to cater for their incompetence and illegality.

Thing is though....you won't actually win anything even if you do get them to accept your account details. You might get an apology out of them but nothing more than that I'd imagine.

If it's bothering you that much why not just cancel the policy and take out another one with someone else?

troyzer

wexie wrote: »

Yes, you get a pro rata refund when you cancel insurance, need to send the disc back.



I don't know to be honest, I get the impression that a lot of companies are struggling with the whole GDPR thing and are frantically trying to figure out what they can and can't do. If I had to guess what's going on in AA is that they've given out very strict guidelines to the front line staff for fear of falling foul of GDPR and are probably overwhelmed with requests, exceptions etc. etc.

While it's probably not right to have to do it I'd second the advice of just saving yourself the grief and getting an Irish account.

Or just get the hell out of the country, mind I'm sure other countries have different idiosyncrasies you'd need to put up with.

The refund definitely takes the edge of one of my concerns. As an aside, is there a rough guide to what I can expect to save from next year? It'll be the same car, an 05 1 litre Yaris but now I'll have 1 year NCB (fingers crossed) and I'll be over 25. If it doesn't drop substantially I'll tear my hair out.

I'd rather have the grief to be honest. I know I'm right and my current setup with my Mam is more convenient than setting up a brand new account for a single direct debit.

I feel sorry for the frontline staff but to be honest, they could have sorted this out months ago with the letter. I would have gone to the CCPB, they'd have followed it up and by now they probably would have been forced to accept it.

As it stands, it looks like they're not going to get back to me by the deadline and from what I've read the fines can be massive. GDPR doesn't mess around with these things.

Fol20

If it was something important, yes keep fighting it. But it’s a banking law which for me would not be one of my priorities. I’d throw all that extra energy into work so you can get your next bonus and pay rise

TheChizler

TBF it sounds like a principle thing, one I'd be fighting if I was in the same situation. Fair play OP if they're wrong and you have the energy for it.