TONY HETHERINGTON: Post Office caves in on insurance

Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below. 

J.S. writes: Would it be possible for you to look into our situation? 

My wife and I are in our 70s and we took out an annual travel insurance policy with the Post Office. Since then, because of the Covid-19 restrictions, we have been unable to travel. 

We have been in touch with the Post Office, hoping to get a refund or to transfer the policy to next year but it refused. 

A month ago, I reported how two senior citizens spent almost £500 on a one-year multi-trip travel policy from the Post Office. They managed one visit to Madeira before lockdown but their holiday plans for the rest of the year seemed to have evaporated, leaving them with some very expensive but completely useless insurance. 

What made the policy useless was the Post Office’s own announcement saying: ‘Policies may be invalidated by travelling to areas that the Foreign and Commonwealth Office advises against. Currently the FCO advises against all international travel.’ 

In other words, just like you, the couple had paid for travel insurance that ceased to cover them if they actually travelled. That is like paying for car insurance that cancels itself if you dare to turn on the ignition. 

No travel meant no lost luggage, no cancelled flights, no accidents or illnesses that needed expensive treatment in a foreign country. And, as a result, insurers pocketed premiums without any risk that they would have to meet claims because there could be no claims. 

I had a word with officials at Post Office HQ and found that although the Post Office markets these policies, the purse strings are really held by two German firms that underwrite them. Decisions on how to treat policyholders were really up to them. 

Since then, events have moved on. Travel to some countries is now possible again. Holidays are back and travel insurance too. Last week, insurance giant Zurich said it would repay policyholders who had been unable to travel because of lockdown. LV= said it would offer refunds or change policy dates to cover rearranged travel plans. 

But there was no similar news from the Post Office. A few days ago, I was about to warn on this page that nobody should pay for Post Office policies while earlier customers found they had forked out for nothing. Then on Thursday came the news I had been hoping for. A spokesperson told me: ‘We now have a solution for our annual multi-trip customers, for policies taken out prior to June 17, 2020, whereby we can offer a pro rata refund for the unused part of their policy.’ 

For all the time the Government advised against foreign travel, policyholders will get their cash back. 

And for you, the outcome is even better. After lockdown began, you actually asked the Post Office to cancel your policy completely. At the time, it refused. 

Officials have now had second thoughts and, as a gesture of goodwill, you will be getting a full refund of your premiums. 

PayPal says ‘guest’ used debit card 

D.M. writes: My bank statement showed an odd debit card payment of £66, said to be to PayPal for something from Royal Mail. 

My PayPal account showed no such purchase, so I contacted my bank, NatWest, which cancelled my card and sent a replacement. PayPal told me a ‘guest account’ bought something unspecified from Royal Mail but denied this was unauthorised. 

Eventually, my bank managed to claim back my money but PayPal has never explained how a ‘guest account’ used my card.

Unauthorised: PayPal says that a ‘guest’ transaction is one where a customer does not have to have a PayPal account

PayPal has told me that a ‘guest’ transaction is one where a customer does not have to have a PayPal account. The customer simply enters the card details, rather than logging in to any account. In short, the fact that you yourself have a PayPal account is a coincidence. Your debit card was misused but your PayPal account was not. 

Someone has got hold of your debit card details and enough information to impersonate you to make a purchase. PayPal accepts what you say, which is why it did not oppose a refund, but the problem lies in the leak of your card details rather than with PayPal. 

If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 2 Derry Street, London W8 5TS or email tony.hetherington@mailonsunday.co.uk. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.