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Charge for protection policy appeared on a defunct card from the high street department store
Out of the blue, we received a Debenhams store card statement showing we owed £80. We had destroyed the card because we hadn't used it for four years and had moved house twice in that time. All our mail has been redirected and, indeed, after the first move our mail was delivered by the same postman we had before.
When we queried the bill with GE Money, we were redirected to CPP, which claimed we had bought its card protection policy using the Debenhams card. We contacted GE, which agreed to freeze the account but, after two weeks, is pressing us again for payment.
When we complained to CPP that this was the first we had heard of it, we were referred to the 14 days cooling-off period that we were supposed to be aware of. We had not the faintest notion that we had taken it out in the first place. Now we are locked in until 2011.
GE says the fault lies with CPP but CPP claims it acted only because GE told it electronically to open the policy in May 2002. GE has now sent another bill for £29 for late payment charges.
MH, Hallaton, Leics
Margaret: CPP tells me you asked for the policy in a phone call to GE Money, of course too long ago for a recording still to exist, and it didn't know you had changed address. Obviously you hadn't told them you moved because you didn't know you had the policy. That doesn't explain how it could later write to you at a subsequent address.
You are not the first reader to complain about CPP charges appearing on a defunct Debenhams card and the process between the two companies worries me. You didn't get the letter from CPP saying the policy was about to be renewed, but you did receive the Debenhams bill after it had been. These charges appear after a gap of several years because you paid for three years' cover at a time. Unless you cancel, the policies are then automatically renewed using the original Debenhams card.
CPP said it would refund the £80 renewal premium to return the balance on the store card to zero, but no money arrived. CPP discovered processing delays affecting GE refunds. GE has now removed its penalty charges and withdrawn the adverse note which, although you didn't realise, it had already put on your credit profile.
Is this really the best deal for my elderly relative?
I have power of attorney for an elderly relative because of his failing eyesight. His bank contacted him because he had a great deal more in his account than the £50,000 that is now guaranteed.
I attended a meeting with him, at the bank, where a financial consultant offered to put £100,000, most of his money, in a bond. We came away with a leaflet on a Norwich Union with-profit inflation-protected guarantee fund. The consultant said it was guaranteed up to £2,000 and 90 per cent on any unlimited sum thereafter. Is this too good to be true?
He lives in a nursing home and pays £800 a week. Although he has a decent pension, he needs ready access to a fairly large sum to top this up.
IS, Aylesbury
Margaret: There are two types of guarantee here. The first, from Norwich Union, is that after five years it will return either your money plus inflation or the amount your money has grown to, whichever is worth more. Overriding that is the amount the Financial Services Compensation Scheme (FSCS) will pay if NU were to disappear.
The FSCS guarantee on life insurance and pensions is better than its guarantee on deposit accounts and investments - all the first £2,000 and 90 per cent of the rest, however much that is. There is no life insurance in this NU investment fund but it is held within NU's Portfolio bond, which is classified as a life-insurance product, so he would get the higher protection.
What the adviser did not know, because it was announced only in late October, is that Norwich Union now applies a market value reduction of between 13 per cent and 22 per cent to unitised with-profits policies, including this one. If your relative withdrew more than 5 per cent a year, he would suffer this substantial penalty.
But there was already a reason why this bond was unsuitable for him and the consultant should have mentioned it. The guarantee costs an extra 0.7 per cent a year for the first 10 years. So he will have paid extra for the guarantee on money he then took out. This is the wrong fund for him. You do not have to take the bank's advice. Ask an IFA for a second opinion - look at unbiased.co.uk.
Missing Isa money
I have an Abbey Isa and noticed that £130 had been mysteriously withdrawn from the account at the Dover branch. I live 170 miles from Dover and found this worrying. Eventually the branch admitted it was their mistake and reinstated the £130, but put it in this year's Isa allowance. I specifically asked them not to do so as I already have a 2008/09 cash Isa. I have written to Abbey's Isa department twice but received no response.
CP, Norwich
Margaret: There's no explanation from Abbey as to why the money was taken from your Isa. But it has unwound the current-year's Isa, refunded the money and sent you a £50 goodwill payment.
Low marks for late pay
I was asked to mark Sats exam papers this summer for £540. At that stage the administrator, ETS, had been partially taken off the job and was a representative of the government's National Assessment Agency (NAA). ETS is now winding up the operation and hasn't paid me. Both ETS and NAA suggest I contact the other.
ETS refuses to provide a telephone number for payroll queries and all the emails I have sent have gone unanswered.
CF, Birmingham
Margaret: NAA tells me your contract is with ETS, which is solely responsible for your payment. It had a word with ETS following my call and a fortnight later your money arrived.
• Email Margaret Dibben at money.writes@observer.co.uk or write to Margaret Dibben, Money Writes, The Observer, 3-7 Herbal Hill, London EC1R 5EJ and include a telephone number. Do not enclose SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.
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