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I changed my auto insurance coverage from company A to company B, effective July 1. I later found that company A had processed an automatic premium payment for the period July 5 - Aug. 5. I called company A and they said they would refund my premium in 10 days. This is not acceptable to me. Could I call my bank and request a "chargeback" for the premium I paid so I can get my money back faster? Are there any downsides to doing this?

EDIT: The insurance company refused to work with me to get my money back to me in anything less than 10 days, so I took matters into my own hands and called my bank to reverse the automatic payment. They got the money back into my account by the next morning with no fee.

  • As this company appears to have committed an act of fraud, have you tried simply informing them that they must issue the refund that day and you are not willing to wait 10 days? Once you bring up chargebacks, they may be more willing to act as these cost them money. – ChrisInEdmonton Jul 8 '13 at 16:43
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    It might not be fraud. The documentation on the account, the timeline of the switch and the date of the transaction are important. – mhoran_psprep Jul 8 '13 at 17:31
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    10 days is reasonable. The bank (or card, if that were the case) would tell you to wait the 10 days. – JTP - Apologise to Monica Jul 8 '13 at 21:51
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    You are paying $700 per month for auto insurance? By the way, if you canceled your policy with Company A on June 30, 11:59 pm and replaced it with a policy from Company B effective July 1, 12:01 am (which is how a lot of policies are written around here), then you should also demand a refund of part of the insurance premium that you paid on June 5, 2013 for coverage from June 5, 2013 through July 4, 2013 11:59 pm. – Dilip Sarwate Jul 9 '13 at 16:00
  • Yes, $700 a month! That's why I switched! – Bart Jul 9 '13 at 16:04
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There's no reason for a chargeback, and you might get charged a fee for invalid chargeback or even sued by the insurance company.

You need to always read the contract and see what the auto-renew policy is and what the local law on the issue is. It might be that you in fact approved that charge.

In any case, since they agreed to refund, and within a reasonable period of time, your chargeback will be invalid. It is likely that by the time the chargeback is even processed by the bank, the refund will be there already.

  • "since they agreed to refund, and within a reasonable period of time". 10 days seems long, but would almost certainly fit the credit card company's definition of 'reasonable', so +1. – ChrisInEdmonton Jul 8 '13 at 18:20
  • As far as I'm concerned, as long as I have not (and will not) receive any benefit in exchange for the payment, there is a reason for a chargeback – Bart Jul 9 '13 at 15:45
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    yeah, but you did receive coverage... What you think is not necessarily what matters. – littleadv Jul 9 '13 at 16:35
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Your bank will undoubtedly charge you a fee for the "chargeback" and so while you will get your money back faster, you will likely end up with less than you would if you were not so impatient and just waited a few days for the refund to show up. I suppose it depends on whether you consider this a downside or not.

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    I have had to issue a chargeback before. My bank certainly didn't charge me a fee for refunding the fraudulent charge on my credit card. – ChrisInEdmonton Jul 8 '13 at 16:40
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    @ChrisInEdmonton Credit card chargebacks are different from a checking account charge back. – Dilip Sarwate Jul 8 '13 at 19:01

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