Leigh | Edited by Johanna
If you paid for Experian's credit monitoring service between January 2011 and 28 July 2014, we believe it unfairly sold the 'ID fraud expenses insurance' as part of your policy, and you may be due £100s back.
Many people have already succeeded in getting refunds via this step-by-step CreditExpert reclaiming guide - our new free online tool helps you draft and manage your complaint, or you can use our free template letters.
In this guide
While every effort's been made to ensure this article's accuracy, it doesn't constitute legal advice tailored to your individual circumstances.
Some inspiration before you begin...
We launched this reclaiming guide back in August 2014 as we believe many who paid for Experian's £15 a month CreditExpert were unfairly sold part of it. Then it was untested so we deliberately only asked for 'pioneers' willing to try it. Some did.
It took time but in March 2015 the Ombudsman ruled in favour of customers in four cases, and since then, Experian has offered 'goodwill' payments to around 100 others (that we know of) who have contacted it for a refund. Here are a few for inspiration...
Having read the article, I used the free Resolver site to send them an email. I had a £225 cheque arrive in the mail this morning. Thank you MoneySavingExpert. - forumite Debt-SYD
I sent Experian a copy of the template letter and I received a goodwill payment of £243.59. Thanks so much for highlighting this issue. - via email, miss d
Filled in the template letters and posted them off last week. Have just been refunded £210 with no questions asked – makes you wonder, doesn’t it! - via email, Valerie
I also used Resolver for this just the other week, and I received a cheque in the post within a week - £205 as a gesture of goodwill … thanks MSE! - forumite lbt01
What's this all about?
CreditExpert - a subscription service offered by Experian - surged in price in January 2011 from a costly £7.99 to an outrageous £14.99 - that's £180 a year. Part of this was automatically including a mostly unnecessary identity fraud expenses insurance product.
Experian offered the CreditExpert bundle on a free 30-day trial after which customers were automatically opted in to the service. This included the insurance, which technically was a separate product to the credit rating service, and like all insurance services, people should have been given a clear opportunity to reject it - yet that was buried in the small print.
We believe Experian therefore sold the product unfairly and people are therefore due the ID fraud element back.
Martin Lewis says...
"I want to explain why we launched this campaign. Experian is a huge credit reference agency. In the old days these firms made their money by selling information to lenders about consumers to help them decide whether to lend to you. You had a legal right (and still do) to access the information via a £2 statutory credit report.
"Then some bright spark had the idea of making money by taking advantage of people's growing interest in their credit scoring. It launched a credit monitoring service, promising to tell you when your status changed, as did its competitor Equifax.
"Back in July 2007 it was priced at £5.99 a month and even then I thought it was expensive as you could get a statutory credit report for just £2.
"Then after a few small price rises, in 2011, it's radically inflated its subscription price, rising to a stonking £14.99 per month, that's £180 per year. I believe this was to take advantage of the fear many people have about not getting a mortgage, or other credit products, which means they will pay anything for a service they think will help.
"In fact, much of what it offers isn't necessary, even the products most people take seriously such as 'find out your credit score' have fundamental flaws. See my beware buying your credit score 60 second guide for more.
"At the same time as the price hike, Experian bundled a 'compulsory' ID fraud insurance expenses add-on to its service - an overblown product offering limited benefit.
"Here I believe Experian slipped up as I think it used the insurance as a negotiating chip to keep its CreditExpert customers. When some people called to cancel the service entirely it said 'we'll cut your price by £5 and we'll only cancel the ID fraud insurance', thereby making the cover effectively a standalone product.
"Companies that sell insurance have a duty to ensure it's suitable and Experian failed to do this. In the months before we launched this guide, the pressure built on Experian.
"Then in the days before we first published this guide in 2014 Experian pulled the policy, replacing it with a non-insurance victims of fraud service for the same price of £14.99 - perhaps noting the writing on the wall. But what about all those people who bought CreditExpert in the past? Some are now getting they're cash back and so that's who we're focusing on.
"Below is a sample letter of the type people have received, while we can't say it will pay out to everyone who complains, it does seem to have adopted a policy of making goodwill payments of £5 a month for each month you had the policy plus 8% interest."
We approached Experian to give it a right to reply on this issue. Here is what it said (in March 2015):
"We highly value our customers and their views and will always look to resolve issues where we can. We have received a small number of individual complaints relating to a previous version of our CreditExpert product, which we are working with each customer to resolve on a case by case basis.
"We care about the service we provide and are always sorry if any of our customers are unhappy about any aspect of CreditExpert. If any customers have any questions or concerns, we would encourage them to call us on 0800 013 88 88 or 0344 481 0800 so we can help."
We however believe you should follow our guide below...
We think bundled ID fraud insurance was unfairly sold
Between January 2011 and 28 July 2014, CreditExpert was £14.99 per month (the first month was free), with the service automatically including ID fraud expenses insurance.
The product covered fees you could have racked up when putting your house back in order if you had fallen victim to ID fraud, such as legal fees, the cost of replacing documents and the cost of making phone calls. It didn't cover any actual loss from the fraud itself.
We think the product was unfairly sold because you effectively had to get the ID cover to sign up, even though it was optional. Experian told us: "They [customers] were unable to proceed if they did not accept the insurance terms and conditions."
It failed to clearly highlight the fact you could cancel it so many unwittingly paid for an expensive, unnecessary and unsuitable policy.
It said this insurance was an integral part of the CreditExpert product. But it was a standalone policy which most people were unaware they could opt out. It listed the ID fraud policy price as a separate £6.40.
If you have a keen eye (see right), you might have seen this little nugget of information, present in confirmation emails and on the Experian site: "The insurance makes up £6.40 out of your £14.99 per month membership fee - if you decide to continue membership after your 30 Day trial."
Under the regulator's rules, all insurance policies can be cancelled within a 14-day cooling-off period. With Experian you could cancel the insurance part and continue with the credit rating subscription but this was not made sufficiently clear.
So, despite how it seemed, you did not have to take CreditExpert AND have the insurance. The T&Cs state:
"If the insured cancels the insurance within 14 days of receipt of insurance documentation and has paid the premium, Experian CreditExpert will issue a full return of any premium paid and the policy will be regarded as not having been taken up by the insured and will be cancelled from inception."
In fact, MSE Leigh mystery shopped Experian and successfully cancelled the insurance during the cooling-off period and only ever paid £9.99 for the service.
It doesn't just work during the cooling-off period either. We tested at the time how Experian reacted to customers trying to cancel the insurance alone even after the 14-days, with a member of MSE team and her partner doing just that. And it worked
The cost of the subscription fell from £14.99 per month to £9.99 per month. The MSE team member and her partner had the cover for 10 months, asked for a refund, and Experian paid back £50 to each of them to cover past payments.
Why weren't customers able to opt out if the product wasn't suitable?
Insurers need to make sure their policies are suitable for their customers, and when buying online this means laying out the T&Cs for consumers to read. Experian only sold insurance online and while it explained what the policy covered, there was no way to opt out of it on sign-up and still continue with the main credit rating product alone.
The only way to have the credit rating product but not the insurance was to sign up to both, but then call up and ask to cancel the insurance alone. This was not made clear enough as it was not explicitly stated on the Experian site.
I am an existing customer but I took out the product before January 2011. Would I have had the ID fraud insurance?
If you subscribed to the product before January 2011 you would not have had ID fraud expenses cover. Existing customers were not automatically subscribed to the new, more expensive, service. Only those who applied for the service as new customers between January 2011 and July 2014 would have paid £14.99 for the subscription including the insurance element.
I am an existing customer and subscribed between January 2011 and July 2014, what insurance would I have had and has it been scrapped now?
If you subscribed between January 2011 and July 2014 you would have had ID fraud expenses insurance. The product has now been scrapped with all users moved to a new package with an enhanced victims of fraud service in its place in August 2014.
We have asked the regulator to investigate Experian CreditExpert ID fraud insurance. We've written to the Financial Conduct Authority to ask it to fully investigate the CreditExpert 'compulsory' ID fraud expenses insurance product. We've urged the regulator to take action to ensure Experian customers are fully refunded. The FCA is yet to comment, but we hope it will take action.
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Despite the cover costing £6.40, in all the cases we've seen Experian has offered users £5 back per month, claiming this is the wholesale value of the product.
This is the same figure the Ombudsman suggested be paid in its preliminary ruling (which Experian didn't argue with). This is because while the product was on sale it was possible to call up and cancel the add-on and pay £9.99, lowering the overall cost by £5.
We believe it should offer more, but it may be more hassle to reject the £5 offer, so it's up to you.
It has also added 8% statutory (non compounded) interest on the amount. This is the amount a court would award if it had to adjudicate. It's assumed that - if you had kept the money - you may have been able to earn interest on it.
For example, if you had the product from January 2011 until July 2014 you could be entitled to £215 compensation and a further £17.20 in interest.
Below is an example of what you might be due if you had the product for one, two or three years.
|One year||Two years||Three years||Max reclaim (three years, seven months)|
|Amount plus interest||£64.80||£129.60||£194.40||£232.20|
How to reclaim CreditExpert ID fraud insurance costs
The ID fraud expenses insurance was bundled with CreditExpert between January 2011 and July 2014. If you subscribed to the product between these dates you would have been forking out £77 a year for ID fraud expenses insurance.
After July 2014 the product was scrapped and a new one, without the insurance add-on, was launched, priced at £14.99 which is the amount it currently costs.
What's the worst that can happen? Will my credit score be affected?
Trying to reclaim your ID fraud expenses insurance premiums will not negatively impact you at all. It may cost a bit of your time - and the price of a stamp if you use one of our template letters - but that is it. In addition, cancelling your ID fraud expenses insurance as part of the wider Experian CreditExpert policy will not have any impact whatsoever on your credit score.
I use another rating agency to manage my credit score, will I have a similar problem?
No, both Equifax Credit Report and Callcredit Credit Compass have ID fraud protection elements but offer an alerting service - notifying you of potential fraud - rather than a bundled insurance policy.
I don't know whether I had the product?
If you are unsure whether you had the product you can call Experian customer services on 0844 481 0053 to find out.
I believe the product was unfairly sold to me. What should I do?
If you had ID fraud insurance with your CreditExpert product, the quickest way to contact it is simply to pick up the phone, call it and ask for your cash back. Our Experian CreditExpert ID fraud calling tips has more information on how to do this.
If you're not confident on the phone - or if you've called and spoken to it without success - you can also reclaim online.
Use our free online tool to reclaim
If you want to reclaim from Experian, you can use our free online tool. It auto-drafts the letter for you, tells you when it's got a response, and escalates it to the Financial Ombudsman Service if necessary.
We do this using the complaints firm Resolver, which provides the technology, but the underlying template letters and logic behind it are ours. We're working with Resolver on many projects to combine our expertise of how to complain with its cutting-edge technology.
All you need is your account or credit report reference, the reason you think you were mis-sold (see the Why we believe it was mis-sold section), the dates you had the product and your postcode.
For more information on how we're working with Resolver see our full Resolver guide.
Alternatively, if you prefer you can download our free Experian CreditExpert ID fraud reclaim template letter, add your details and send it directly to Experian. If you do this, make sure you keep a copy - it'll be helpful if you need to go to the Ombudsman.
What if Experian rejects the complaint?
If Experian then rejects your complaint you can always go to the free Financial Ombudsman Service after eight weeks have passed. It's an official body - and an impartial adjudicator - for settling disputes between individuals and financial firms. It'll decide whether your account and the circumstances under which it was sold, were unfair, then decide what redress is required
If you're reclaiming using Resolver, it'll remind you when it's time to escalate your case to the Ombudsman and help you do so.
Alternatively if you wrote to Experian directly, you can escalate your case by filling in the Ombudsman complaint form.
If you need help filling this out, you can call the Ombudsman on 0300 123 9123 or 0800 023 4567, and it'll guide you through the complaint form or use our complaint form help. It's written in Microsoft Word so you can easily cut and paste sections or print it and have it next to you as you're filling in the Ombudsman's form.
How long will it take for the Ombudsman to get back to me?
It will take at least a few months to get a reply, depending on the other complaints currently being handled by the Ombudsman. However, the Ombudsman will contact you with any offers from Experian, so you can leave the matter in its hands.
What are my options if the Ombudsman rejects my complaint?
The Ombudsman's decision is usually made by an assigned adjudicator, but if you disagree with the result, you can ask for a formal decision to be made by one of the official ombudsmen at the service. This usually takes several months as it involves a detailed investigation.
After that, while Experian must accept the Ombudsman's decision, you still have the right to take the company to court if you disagree.
If you feel the Ombudsman hasn't handled your case correctly - for example, there have been unnecessary delays - you can ask for a senior manager to review it. If that doesn't resolve things, you've a right to go to the Independent Assessor (however, this is only about quality of service, not the actual decision made).
For other complaints the Ombudsman can help with, see the Your Financial Rights guide.
Can I complain if I've used the cover?
The number of policyholders who have actually claimed on ID fraud expenses cover is believed to be relatively low. However, making a claim on the policy is likely to mean that the product was suitable for your needs. We wouldn't recommend trying to complain in this instance and your chances of getting a refund would be incredibly slim.
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