Customer in the dark only because she failed to read online statements or tell bank of change of address

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Customer in the dark only because she failed to read online statements or tell bank of change of address

Categories:

Insurance policies,

Summary:

In 2007, Pearl took out a life insurance policy with an insurance company. She paid the monthly premiums by direct debit from her bank account. In 2021, the bank dishonoured her direct debit payments for July and August because she did not have enough money in her account. As a result, the policy lapsed. Pearl visited the bank in February 2023 to check on her accounts and learned her policy had lapsed. She complained to us that the bank had failed to tell her about the lack of funds. She also complained that the bank had dishonoured the payments from her account.

Published:

September 2024

Our investigation

We found the bank had met the obligations set out in the terms and conditions of Pearl’s accounts about how it would communicate with her. The bank had made online statements available to her since she became a customer in 2007. It had also sent correspondence to her registered address when the account became overdrawn in July 2021. The letter notified her that the account was overdrawn and pointed out the possible consequences of failing to put money in the account to cover the payments. Pearl no longer lived at the address where the letter was sent, but it was her responsibility to keep the bank advised of her current address.

As for the bank’s dishonouring of her payments, we told her the bank was entitled to do this if there were not sufficient funds in her account. We also said the bank was not responsible for any consequences of dishonouring the payments, such as the lapsing of her insurance policy.