Benscomputer.no-ip.org - The AA Incurs my Wrath

As most who live in the UK will know The AA are perhaps the largest roadside recovery service in the country. However their policies are somewhat consumer un-friendly as my partner found out.

She had AA Breakdown Option 200 on her bike, and renewed this in December '06 (although payment was not taken until January '07) Unfortunately her bike as gone onto bikey heaven, just a month or so after she renewed her cover. First thing to do was cancel the isnurance (it broke down as opposed to crashed) and then to contact the AA and try to get a partial refund (she had paid the year in full).

It turns out The AA has this gem of a clause in its Terms and Conditions which basically states that if the year is paid in full upfront no refund will be available should the member later wish to cancel their cover!

So having been told this, she asked me about it so I wrote the following letter for her. Any sections that I printed in italics are shown in green;

Thursday 1st February

Dear Sir/Madam,

I am writing to you today having contacted The AA in order to cancel my membership. The bike to which the membership applies is no longer in use and so my AA Breakdown option 200 cover is no longer required. For your reference my membership details are shown below;

Membership Number: [membership number]

Vehicle Registration: [REG]

Renewal Date: 19/12/2006

Having contacted The AA in order to cancel my membership I was informed that because full payment had been made no refund could be made in accordance with section 8 a) of The AA's terms and conditions. I am writing to you today because this is simply not acceptable. The AA's terms and conditions define Annual cover as follows

Annual Membership: cover is for 12 months and is paid for in a lump sum or four quarterly instalments. If you pay for Annual cover under a recurring payment authority, for example by Direct Debit, we will automatically renew your cover at the end of the Membership Year. You will always be advised of this in advance and have the opportunity to cancel your Membership;

The AA has clearly stated that the payment of £90.50 is for a duration of 12 months, this implies that a month of cover from The AA costs approximately £7.50. My membership was renewed on 19^th December 2006. To date I have been covered for 1 month and 13 days under my new policy. Assuming that monthly fee's are paid in advance this means that I have received £11.12 worth of cover. I realise that most companies charge on the basis of whole calendar months which means The AA is entitled to £15 plus a reasonable administration fee for processing my cancellation.

I believe that term section 8 a) of The AA's Terms and Conditions violates the The Unfair Terms in Consumer Contracts Regulations 1999. I also believe that should this progress to a County Court utilising the 'small claims track' a judge would agree that The AA's stance that a refund cannot be made from a full payment is unfair.

I base this belief on the basis of several elements of The Unfair Terms in Consumer Contracts Regulations 1999. The most prominent example is the following section;

- (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

The regulation defines a contractual term which has not been individually negotiated as A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term. As the Terms and Conditions published by the AA are used as standard, we can infer that each individual member of the AA has not been given the opportunity to 'influence the substance of the term.' Therefore in no way can any part of The AA's Terms and Conditions be classified as 'individually negotiated.'

Furthermore 5(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was.

As we have seen the regulation defines unfair terms as a contractual term causing a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer. I believe that in a court of law, The AA would find it very difficult to show that my being charged a full years membership, despite not requiring any further services from yourselves, is not to the detriment of the consumer (myself).

As section 8(1) of the aforementioned act states “An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.”

Schedule 2 of the aforementioned act defines the following as an example of an unfair term;

(d) permitting the seller or supplier to retain sums paid by the consumer where the latter decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the seller or supplier where the latter is the party cancelling the contract;

The AA's Terms and conditions state that;

No refund shall be due to the Member under sub-clause a) and b). In the event that the AA cancels a Membership in accordance with sub-clause c), the AA shall give Members with Annual cover a pro rata refund based on the unexpired cover at cancellation (provided no service has been given and subject to a minimum administration charge of £30) and, for Members with Continuous cover, cancellation will take effect at the next payment due date and no refund will be due to the Member.

The AA does not explicitly grant the consumers right to a refund should the AA decide to discontinue their services for any reason other than being in violation of sub-clauses a) b) or c) of The AA's Terms and Conditions. Therefore I believe that this in itself is a contravention of the The Unfair Terms in Consumer Contracts Regulations 1999.

Please also note that the address shown in the header of this correspondence differs to that on my account, despite informing the AA of my change of address several times this still appears not to have been actioned. Please ensure all correspondence is sent to me at [my address]

Thank you for your time, and I hope that we can settle this matter to the satisfaction of both parties. Currently The AA holds a sum of money that I do not believe they are entitled to, I am willing to pay for 2 months cover and a reasonable administration fee, but the remainder of the sum charged by The AA must be refunded to myself.

Please also note that the AA's policy that cancellations will be subject to a minimum administration charge of £30, could be viewed as a punitive charge and so not legally enforceable under UK or EU law.

Thank you again for your time

Just as I was getting ready to send the AA a rather strongly worded 'chase up' letter, we received word that a reply had been received at her old address. Despite my clearly stating the address that any correspondence should be sent to, they had still sent it to the wrong address. Very Tiscali!

Although I have not yet had chance to read their reply, I am told that it states that The AA will refund the amount of £67. The remainder I presume covers the period for which she had cover and an adminsitration charge, when I do get opportunity to read it I will transcribe and post it.


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It turns out The AA has this gem of a clause in its Terms and Conditions which basically states that if the year is paid in full upfront no refund will be available should the member later wish to cancel their cover! So having been told this, she asked me about it so I wrote the following letter for her. Any sections that I printed in italics are shown in green; Thursday 1st February Dear Sir/Madam, I am writing to you today having contacted The AA in order to cancel my membership. The bike to which the membership applies is no longer in use and so my AA Breakdown option 200 cover is no longer required. For your reference my membership details are shown below; Membership Number: [membership number] Vehicle Registration: [REG] Renewal Date: 19/12/2006 Having contacted The AA in order to cancel my membership I was informed that because full payment had been made no refund could be made in accordance with section 8 a) of The AA's terms and conditions. I am writing to you today because this is simply not acceptable. The AA's terms and conditions define Annual cover as follows Annual Membership: cover is for 12 months and is paid for in a lump sum or four quarterly instalments. If you pay for Annual cover under a recurring payment authority, for example by Direct Debit, we will automatically renew your cover at the end of the Membership Year. You will always be advised of this in advance and have the opportunity to cancel your Membership; The AA has clearly stated that the payment of £90.50 is for a duration of 12 months, this implies that a month of cover from The AA costs approximately £7.50. My membership was renewed on 19^th December 2006. To date I have been covered for 1 month and 13 days under my new policy. Assuming that monthly fee's are paid in advance this means that I have received £11.12 worth of cover. I realise that most companies charge on the basis of whole calendar months which means The AA is entitled to £15 plus a reasonable administration fee for processing my cancellation. I believe that term section 8 a) of The AA's Terms and Conditions violates the The Unfair Terms in Consumer Contracts Regulations 1999. I also believe that should this progress to a County Court utilising the 'small claims track' a judge would agree that The AA's stance that a refund cannot be made from a full payment is unfair. I base this belief on the basis of several elements of The Unfair Terms in Consumer Contracts Regulations 1999. The most prominent example is the following section; - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer. The regulation defines a contractual term which has not been individually negotiated as A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term. As the Terms and Conditions published by the AA are used as standard, we can infer that each individual member of the AA has not been given the opportunity to 'influence the substance of the term.' Therefore in no way can any part of The AA's Terms and Conditions be classified as 'individually negotiated.' Furthermore 5(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was. As we have seen the regulation defines unfair terms as a contractual term causing a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer. I believe that in a court of law, The AA would find it very difficult to show that my being charged a full years membership, despite not requiring any further services from yourselves, is not to the detriment of the consumer (myself). As section 8(1) of the aforementioned act states “An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.” Schedule 2 of the aforementioned act defines the following as an example of an unfair term; (d) permitting the seller or supplier to retain sums paid by the consumer where the latter decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the seller or supplier where the latter is the party cancelling the contract; The AA's Terms and conditions state that; No refund shall be due to the Member under sub-clause a) and b). In the event that the AA cancels a Membership in accordance with sub-clause c), the AA shall give Members with Annual cover a pro rata refund based on the unexpired cover at cancellation (provided no service has been given and subject to a minimum administration charge of £30) and, for Members with Continuous cover, cancellation will take effect at the next payment due date and no refund will be due to the Member. The AA does not explicitly grant the consumers right to a refund should the AA decide to discontinue their services for any reason other than being in violation of sub-clauses a) b) or c) of The AA's Terms and Conditions. Therefore I believe that this in itself is a contravention of the The Unfair Terms in Consumer Contracts Regulations 1999. Please also note that the address shown in the header of this correspondence differs to that on my account, despite informing the AA of my change of address several times this still appears not to have been actioned. Please ensure all correspondence is sent to me at [my address] Thank you for your time, and I hope that we can settle this matter to the satisfaction of both parties. Currently The AA holds a sum of money that I do not believe they are entitled to, I am willing to pay for 2 months cover and a reasonable administration fee, but the remainder of the sum charged by The AA must be refunded to myself. Please also note that the AA's policy that cancellations will be subject to a minimum administration charge of £30, could be viewed as a punitive charge and so not legally enforceable under UK or EU law. Thank you again for your time Just as I was getting ready to send the AA a rather strongly worded 'chase up' letter, we received word that a reply had been received at her old address. Despite my clearly stating the address that any correspondence should be sent to, they had still sent it to the wrong address. Very Tiscali! Although I have not yet had chance to read their reply, I am told that it states that The AA will refund the amount of £67. The remainder I presume covers the period for which she had cover and an adminsitration charge, when I do get opportunity to read it I will transcribe and post it.