Are you sitting comfortably? Then Ill begin
Once upon a time there was an insurance company called S and another one called A. They each had a client called I (thats me, in case you were wondering). I had a life insurance policy with A and a superannuation policy with S. Year in and year out, at monthly intervals, both S and A extracted vast amounts of money from my bank account using direct debit authorities set up for exactly that purpose.
I was never very sure what A did with my money, apart from vaguely promising to pay it all back to me with enormous interest added on should I ever be unfortunate enough to die. However S were much more open about what they needed the money for. Every month they invested and reinvested my money in the stock market. S were very proud of the skill of the professional gamblers that they employed for this function. S dignified these dice-rollers with the job title of Financial Managers. Every year S would send me large, expensively glossy statements that extolled the virtues and talents of the problem gamblers that were in charge of investing the slowly accumulating funds in my account. I always found these documents very puzzling when I added up the amount of money that had vanished from my bank account over the years and compared it with the accumulated sum in my superannuation account, I failed to see any significant difference between the two totals. All the profits that the investments generated, if indeed there were any, appeared to have vanished into a line item called Fees. I was less than impressed with the final minuscule sum that was somehow supposed to pay for my retirement. It occurred to me that the funds would probably grow much faster if I simply stuck the money in a term deposit account in a bank and forgot all about it for a decade. The slow, steady, conservative performance of a term deposit was consistently better than that of the less than inspiring guesswork produced by the random number generators used by the Financial Managers at S in their frantic attempts to foresee the performance of the stock market. But being lazy, and hating to mess with the status quo, I just let things drift.
And then one day I turned on the radio and heard an announcer say: "The world is falling into a recession. Stock markets are collapsing and insurance and finance companies all over the planet are going bankrupt. The sky is falling! The old order is coming to an end. Woe! Woe! Sackcloth and ashes are now the garments of choice on casual Friday. Unclean! Unclean! The great bell tolls for us all and lamentations are heard from the palaces of the smug and prosperous."
"Hmmm!" I thought to myself. "I wonder how that will affect me?"
It wasn't long before I found out. Two days later a letter arrived from A (remember them?).
"Don't worry," said the letter in soothing tones. "The fact that our parent company in America has just gone spectacularly bankrupt is of no importance whatsoever. It really doesn't matter that all the directors are on trial for fraud, and nobody except the directors themselves cares that they will probably go to jail for a thousand years each. Trust us, none of this is of any significance whatsoever and we are committed to continuing to provide you with an absolutely first class service on your life insurance policy. Honest!"
"Really?" I asked. "Pull the other one, it plays Hey, Big Spender!"
"That's right," continued the letter from A. "None of it matters a fig. We won't go bankrupt like head office did. And anyway, we don't have any connection at all to the insurance company in America that has the same name as us. We're not really a branch of them. No, no, not at all, not at all. Oh, by the way, we're increasing your premium payments."
"No you aren't," I said, and I rang my financial advisor.
"No problem," said my financial advisor. "I'll cancel the life insurance policy with A and set up a new one with S. And I'll send you a form to fill in instructing S to close the superannuation account and transfer the money to you so that you can put it in a term deposit."
"Sounds good," I said..
"And you'd better cancel the direct debit authorities," continued my financial advisor. "You don't want A and S to take any more money now that you have decided to cancel their policies."
That sounded like good advice to me. What's the point of having a financial advisor if you don't listen to the advice you get? So I filled in all the forms and cancelled all the direct debit authorities. And that's when my problems really started
The first hint that something might be going wrong was an extremely rude letter from A.
"The direct debit request for this month's premium payment was refused by the bank," said A. "Fix this immediately or face the awful consequences."
"You shouldn't even be trying to take any money from me," I said. "I cancelled the policy."
"What difference does that make?" asked A. "We've got a direct debit authority. That means we can take as much money as we want from you whenever we like and you can't stop us."
"Yes I can," I said. "All I have to do is cancel the direct debit, and that's exactly what I've done because I no longer have an insurance policy with you."
"That's all very well," said A, "but we are an insurance company and therefore we never get anything wrong. The policy isn't cancelled until we say it is cancelled. So you need to stop prevaricating and pay us the money immediately."
"No," I said.
"Humph." A departed in an angry silence and a week later I received another letter informing me that they noted that the policy had been cancelled and therefore I should feel free to cancel their direct debit authority since they would no longer need to take money from it. Being grateful for a happy ending, I left it at that. But more troubles were soon on the way.
"Now then," said S, "you've sent instructions to cancel the superannuation policy and transfer the funds to you. That sounds like a very bad idea to us. Do you realise that since you sent us those instructions the value of your account has decreased by $8,000? We strongly advise you not to cancel the account. Leave the money in there and wait for it to recover."
"But what if the value goes down even further?" I asked.
S made spluttering noises. "Oh, in my opinion that's extremely unlikely."
"Other people's opinions differ from yours," I pointed out. "I just want to cut my losses before things get even worse. I've filled in the form and signed it in triplicate in all the right places. Why can't you just follow instructions and send me what little money remains?"
"Because you are a customer," said S, "and customers are always wrong."
"I'm not changing my mind," I said.
"Oh all right," said S with bad grace. "I'll send you a cheque sometime this week."
"Please hurry up," I said. "I'd hate to lose even more money while I'm waiting."
"All right, all right," grumbled S. "Now about this new life insurance policy you've taken out with us."
"What about it?"
"We need you to fill in a direct debit authority form immediately," said S. "I'll post one to you today."
"No," I said, "you don't need me to fill one in. You'd like me to fill one in."
"That's what I said." S sounded puzzled.
The direct debit authority form arrived the next morning and I filled it in and returned it immediately. The cheque for the superannuation money arrived four days later. Amusingly, another $1,000 had vanished from the account in the interim.
The date of the first premium payment on the life insurance policy came and went, closely followed by a very rude letter from S.
"The bank refused the direct debit request," said S. "I don't know what you think you're playing at, but get it fixed immediately. Meanwhile, send us a cheque for the premium you missed. Now!"
I posted a cheque to S and then visited the bank. "What's all this about refusing a direct debit request?" I asked.
A charming young lady rummaged through files and tapped keys on her keyboard. She looked flummoxed. "I really can't explain it," she said. "There's no record of us refusing the request. Indeed, we would have had no legitimate reason to refuse it. Your account was well in credit when the payment was due, and even if it hadn't been, you've got a huge overdraft facility on the account, so we'd still have honoured the payment."
I passed this information on to S.
"Oh," said S. "Probably we requested payment from the bank before we actually posted the direct debit form to them. That's handled by people in two different departments and they don't synchronise their procedures very well because their desks are on opposite sides of the room. And they don't communicate at all because they had a huge row about who ate the last chocolate biscuit at morning tea. They haven't spoken a word to each other for six months. Your cheque hasn't arrived yet. Are you sure you posted it? Get your finger out."
I reassured S that the cheque was in the mail; a phrase which I always enjoy immensely every time I use it, but which I get to use less and less frequently in this modern era of electronic banking. Computers have a lot to answer for. In my opinion they have destroyed far too many of life's little pleasures. S grumbled away back into whatever hole it had crawled out of, and I settled down to take advantage of a small period of perfect peace. Then one more letter arrived from S and the final, ludicrously surreal chapter of this comedy of errors unfolded itself.
"We've had a communication from the bank," said S. "Our direct debit authority has been cancelled on your instructions. What on earth do you think you are playing at? To reinstate it, we have to start again from scratch. There's a new direct debit authority form included with this letter. We need you to fill it in and return it to us immediately."
I underlined the word need and put a question mark beside it. Then I contacted the bank. "I don't remember cancelling the direct debit," I said. "Did I do it in my sleep? Was I drunk perchance, or under the influence of hallucinogenic drugs? Perhaps I have an identical twin brother from whom I was separated at birth and who has been blighting my life in secret ever since?"
"No, you didn't do it at all," said the same charming lady with whom I had spoken last time. "The instructions to cancel the direct debit came directly from S, not from you."
"Thank you," I said, and I passed the information on to S.
"Nonsense," said S. "You did it."
"Didn't, didn't, didn't!"
"Did, did, did! A thousand times did!! Nyah! Nyah! Nyah! We're an insurance company and we don't make mistakes. You are only a customer. By definition everything is your fault. Fill in the new direct debit form immediately so that the next premium payment can go through without any fuss."
I heaved a huge sigh, but S dodged it skilfully and it did no harm. The next day, S contacted me again.
"That direct debit authority?" said S.
"It seems we did cancel it after all. Well, what we actually did was cancel the direct debit payment on the superannuation policy that you closed down. However since you had already cancelled that authority, the only remaining direct debit on your account was the new one that we'd just set up for the life insurance policy. Consequently our instructions to the bank had the unfortunate side effect of cancelling the new authority instead of the old one. So it really was your fault after all. If you hadn't cancelled the superannuation direct debit, none of this would ever have happened."
"But I closed the superannuation policy down three months ago," I said. "If I hadn't cancelled that direct debit authority, it would have stayed active and you'd have taken three premiums to which you were not entitled."
"Of course we were entitled to them," said S. "A direct debit authority allows us to take as much money from you as we want, whenever we wish. That's what insurance companies do with direct debits. Surely that's been explained to you before. Don't you know anything? Now, get your finger out and send us the form again. Don't forget to sign it in blood. Preferably your own."
I posted the direct debit authority form last week. So far I've heard nothing back from S. Mind you, it is Christmas and consequently there is nobody in their office to process the form. That's probably my fault.