Ask Me Help Desk - Credit Card Insurance Problems

I have a complaint against MBNA, in particular the insurance for the card. I'll try to keep this as brief as possible.

In 2000, my wife applied for the card and gave me one as well. Shortly after that in 2001, I received a call from a telemarketer at MBNA asking if I would like insurance on the card to maintain minimum payments in case of layoff or an accident. Etc. I said yes because the limit was low, we had a low balance and the premium was only $0.99/ $100 balance owing. I didn't tell my wife because it was such an insignificant amount.

Fast forward to early 2006. My wife was unemployed for about 9 months and (unknown to me) had been paying bills with the card. We were receiving several calls from MBNA but they wouldn’t disclose ANY details to me. It was only after I had my wife add me as a secondary cardholder that they would tell me anything. Well I found out that she owed them $16,000. When I looked at the bill, I saw, and remembered, that there was insurance on there that was adding over $160 to the total every month. I told my wife about the insurance and needless to say was quite annoyed with me for adding it in the first place. She never even realized that there was insurance on the card because she never asked for it – it was listed as INS COV PLAN. I immediately recognized it but she thought it was part of her original agreement because it had always been there and the amount fluctuated with the balance. She said, “You put it on, you take it off”. So I tried. I couldn’t – only the primary could. But I also found out that only the primary or secondary card holder could put it on there in the first place. I wasn’t even a secondary cardholder when I agreed to have insurance. It wasn’t even my card (I thought it was from the way the telemarketer talked to me).

I'm not disputing the purchases; what I am disputing is the insurance. I had no idea that it was only my wife’s card; I had believed all along that it was a joint account. The card was never in my name. If I didn't have the authority to even know what the balance was, how could I have had the authority to add insurance? And the insurance listed in the statement is abbreviated (unlike everything else on the statement) even though there is plenty of room to write it out in full. She might have realized what it was and cancelled it if it was written in full.

I am not sure how to deal with this or if there is any chance of eliminating the insurance charges. Are we SoL? If you have any suggestions as to how this could be resolved it would be greatly appreciated.

From Ontario, Canada

Why aren't you trying to put in a claim for payment during your wife's unemployment?

Quote:

Originally Posted by ScottGem

Why aren't you trying to put in a claim for payment during your wife's unemployment?

For a few reasons: It was over 2 years ago now. At the time, I had forgotten about the insurance (and my wife never knew about it). And I wouldn't have thought it was even necessary because the amount on the card, as far as I knew, was insignificant. For the most part that is when the debt accumulated. My wife was using it to pay bills. She had said she received a severance and I thought that was carrying her through. But apparently she didn’t get as much severance as I thought.
My argument isn’t with the amounts that she charged to the card or the interest on that amount. It’s with the fact that they allowed me to put insurance on her card in the first place. It wasn’t my card at all – I had absolutely no authority to do so but they made it seem like it was my card at the time. It was only when I started investigating the balance and amount due that I found out I had absolutely no authority to find out any information about the card. I had as much authority to alter the terms of her contract as you do.

That last line didn't come off quite the way I had intended. Reading it again it sounds a bit rude. No rudeness was intended.

Ok, So what are you trying to do, get them to credit the money they took out? Have you asked them why they allowed the program to start?

Depending on their answer, you may or may not have a case against them.

I think that all the insurance premiums should be cancelled. I have talked to them and they say that my wife had 60 days to cancel if she wanted to opt out. But seeing as she never knew it was on there in the first place how could she? They also claim that they send out a confirmation by standard mail as part of their policy. Neither of us recall receiving anything of the kind, however, we regularly receive several offers from Mastercard for offers that we are not interested in and regularly toss. If it looked like an offer - it would be recycled by now.
From my limited understanding of the law, allowing someone else to change her contract made at least that part of the contract void. They broke the law. They intentionally dedceived me (as far as I can see anyway) into thinking that I had authority. They knew my name was not on the card and had no authority as they were all to quick to point out when I tried to find out what was owing and tried to cancel the insurance. Sorry I am rambling but I get steamed just thinking about it!

Frankly, the telemarketer who called you may not have known. Most likely, you were called by a contractor doing telemarketing for MBNA. However, you may have a valid argument that you had no authority to fcontract for the service. But their contention is that there was ample notice of the charge.

So your recourse now is to take them to court. I don't know the limits for small claims court in Canada or the total you have paid, so I can't tell if it fits.

However, the fact that the charge WAS listed on the statement for a couple of years and continued to be paid will greatly weaken your case.

Quote:

Originally Posted by ScottGem

I don't know the limits for small claims court in Canada

No!

Small claims court is a provincial matter.

Each province has its own limits…

Here in Ontario, the maximum you can sue for in small claims court is $10,000

Source: http://www.attorneygeneral.jus.gov.o...c/b4aClaim.asp

Now, on to the SOL :

For all contracted services before Jan 1, 2004, you have 6 years.

For all contracted services after Jan 1, 2004, you have 2 years.

Now, on to your case:

You wife MIGHT have a case. But, she also might NOT have a case.

What does her contract with MBNA state? Does it state that a secondary user can add the insurance? If it does, then she will probably lose.

Another reason she might be fighting an uphill battle is that for 6 years, she never did anything about it.

However, if you can prove the first point (that you had no authority to put the charge on the bill), she might be able to get back some of the insurance premiums. Especially since you never did use the insurance.

Now, on to some more serious matters about your marriage:

From reading what you have written, some issues about your marriage have come up. You seem to have a lack of communication with your wife, which is not a good thing. 2 things I read which I did not like the sounds of were:

Quote:

Originally Posted by Mot

Shortly after that in 2001, I received a call from a telemarketer at MBNA asking if I would like insurance on the card to maintain minimum payments in case of layoff or an accident. Etc. I said yes because the limit was low, we had a low balance and the premium was only $0.99/ $100 balance owing. I didn't tell my wife because it was such an insignificant amount.

Whether it was a significant amount or not, you need to tell her when you buy insurance!

You should both be on the same page when it comes to finances.

A side note here, insurance on a credit card in a situation like this is usually a rip off.

Quote:

Originally Posted by Mot

Well I found out that she owed them $16,000. When I looked at the bill, I saw, and remembered, that there was insurance on there that was adding over $160 to the total every month. I told my wife about the insurance and needless to say was quite annoyed with me for adding it in the first place. She never even realized that there was insurance on the card because she never asked for it – it was listed as INS COV PLAN.

She does not communicate with you about the amount on the card or how she has been paying the bills. Again, a lack of communication with your wife.

Side note to her: She must ALAWYS read through her policy and look over all charges. If she sees INS COV PLAN, she needs to look into exactly what that means.