URGENT FORMAL COMPLAINT – Disputed Vehicle Finance Insurance Charges, Account Escalation to Recoveries & Request for Immediate Investigation/Hold

Dear Ms Van Schalkwyk,

Thank you for taking ownership of my complaint and advising that you will investigate the matter.

I am writing to formally place on record the seriousness of my concern regarding my Absa vehicle finance account, the disputed insurance-related charges, the unexplained escalation of the account to Recoveries, and the manner in which my repeated requests for assistance have been handled.

I want to make it clear from the outset that I am not disputing the requirement that a financed vehicle must have comprehensive insurance. I fully understand Absa’s financial interest in the vehicle and the requirement for appropriate insurance cover.

My dispute concerns the manner in which the insurance charges were subsequently app**** to my vehicle finance account, the failure to action my replacement insurance proof, the apparent continued accumulation of charges, the lack of response to my repeated requests for managerial intervention, and the subsequent escalation of the account while this matter remained unresolved.

1. Background and original insurance issue

My normal monthly vehicle instalment is approximately R6,000.

My last payment was R7,000.

I was subsequently contacted by Absa and informed that the account was in arrears because Absa had added insurance to the account after I had failed to provide proof of insurance.

I acknowledge that there was an initial period during which my vehicle insurance had lapsed and that Absa was entitled to require the vehicle to be insured. I therefore immediately reinstated my own comprehensive vehicle insurance.

I then requested the appropriate email address from Absa and submitted proof of my comprehensive insurance so that Absa could verify the cover and stop applying its own insurance charges.

This was done specifically to prevent unnecessary additional insurance charges from being added to an already substantial monthly vehicle instalment.

I am also confused by the way these charges appear to have been treated. When a normal insurance policy is not paid, the insurer generally does not continue providing cover indefinitely and simply carry the unpaid premium forward as an accumulating debt in the same way that a loan balance may grow. The policy may instead be cancelled, suspended or treated as unpaid, depending on the policy terms.

I therefore require Absa to explain why its insurance-related amounts appear to have been carried forward and added to my vehicle finance balance, and whether Absa is acting as an insurer, a credit provider, or both in relation to these amounts. I understand that Absa’s vehicle-finance arrangements and insurance arrangements may operate differently from an ordinary standalone insurance policy, but the distinction must be clearly explained and supported by the relevant contractual terms.

2. My repeated attempts to resolve the matter

After submitting proof of my own comprehensive insurance, I repeatedly requested that a manager contact me to clarify the insurance charges that Absa was treating as arrears.

I was assured that a manager would contact me.

No manager contacted me.

I continued contacting different Absa departments over an extended period, attempting to resolve the matter.

Instead, I experienced repeated transfers between departments, calls being dropped, and having to explain the same issue repeatedly to different consultants without receiving a substantive answer.

This was extremely concerning, particularly because I was actively attempting to resolve the account and was not refusing to engage with Absa.

The lack of resolution was therefore not caused by my refusal to communicate.

3. Continued charges while the dispute remained unresolved

Despite my having supp**** proof of comprehensive insurance and repeatedly requesting clarification, I was not provided with a clear statement showing:

* the exact insurance premiums charged; * the periods to which those premiums related; * the date on which my replacement insurance was received; * whether and when my replacement insurance was verified; * whether Absa’s insurance was subsequently cancelled; * why further insurance-related amounts continued appearing on the account; * whether those amounts were treated as insurance premiums, credit advances, arrears, fees or another type of charge; * what interest and/or other charges were subsequently app**** to those amounts; and * how the outstanding balance was calculated.

Instead, the account continued to accumulate amounts that I was unable to reconcile with the information I had been given.

This placed me in an impossible position: I was repeatedly attempting to obtain clarity and make the correct payment, while the underlying insurance dispute remained unresolved.

I also require Absa to explain why its treatment of these amounts appears different from the way ordinary insurers treat unpaid monthly premiums. I am not assuming that the two arrangements are legally identical, but because Absa’s charges were added to a vehicle-finance account, I need to understand precisely whether the amounts were:

* monthly insurance premiums; * amounts financed under the vehicle-finance agreement; * arrears under the credit agreement; * administrative or collection charges; or * another category of debt.

4. My attempt to make a substantial payment

Despite the unresolved issue, I made every effort to address the vehicle finance account.

This week, I specifically took approximately two hours away from work because I intended to make a payment of R10,000 toward the account.

I was then informed by Collections that the amount allegedly outstanding had increased to approximately R24,000, including amounts attributed to insurance.

This was extremely alarming.

I had approached Absa with the intention of making a substantial payment, only to discover that the account had escalated significantly while my repeated requests for clarification had remained unresolved.

5. Escalation to Recoveries

What concerns me most is that while my formal complaint is currently being investigated and I am awaiting the outcome of that investigation, I have now been informed that my account has been moved from the normal Collections department to Recoveries and that I have received communication regarding possible repossession of my vehicle.

I consider this escalation extremely concerning and premature.

There is an active dispute regarding the composition and calculation of the alleged arrears.

I have repeatedly attempted to resolve the dispute.

I supp**** proof of my own comprehensive insurance.

I repeatedly requested managerial intervention.

I attempted to make a substantial payment.

I have now formally lodged a complaint which is being investigated by your Customer Value Management/Social Media Complaints team.

It is therefore unreasonable for me to be expected to accept an alleged arrears balance without first being provided with a complete and transparent reconciliation of the account.

6. Insurance charges require specific clarification

I am specifically requesting clarity on how Absa treats insurance premiums where the credit provider initially places insurance on a financed vehicle but the customer subsequently obtains and provides proof of acceptable comprehensive insurance from an independent insurer.

I understand that insurance is compulsory for a financed vehicle and that Absa has a legitimate financial interest in ensuring the vehicle remains adequately insured.

However, I also understand that a consumer may obtain insurance from an insurer of their choice, subject to the credit provider’s requirements.

I am confused because ordinary insurance companies do not generally continue providing cover indefinitely without payment and then simply add every unpaid monthly premium to the next month as an open-ended debt. If a premium is unpaid, the policy may be cancelled or suspended in accordance with the policy terms. I therefore require Absa to explain why its insurance-related charges appear to have been carried forward into the vehicle-finance account and whether this treatment is authorised by my finance agreement.

I therefore require Absa to explain, in writing and with reference to my specific finance agreement:

1. The contractual basis upon which each insurance charge was raised. 2. The exact period covered by each insurance charge. 3. Whether each charge represented an insurance premium, a financed amount, an arrear, a fee or another type of charge. 4. The date on which Absa received my proof of comprehensive insurance. 5. The date on which that proof was assessed and either accepted or rejected. 6. The reason Absa’s insurance continued to be charged after I supp**** proof of replacement comprehensive insurance, if applicable. 7. Whether any duplicate insurance cover existed during any period. 8. Why unpaid insurance-related amounts were carried forward into subsequent months. 9. Whether those amounts were added to the principal debt under the finance agreement. 10. The contractual and statutory basis for any interest charged on insurance-related amounts. 11. Whether interest was charged on insurance premiums, arrears, fees or another category of amount. 12. Whether any collection, administration or recovery fees were added because of the disputed insurance charges. 13. The contractual basis for carrying any alleged insurance arrears forward into subsequent months. 14. A full calculation showing exactly how the alleged R24,000 outstanding balance was reached.

I am not asking for a generic explanation of vehicle insurance.

I am asking for a transaction-level explanation of my account and a clear explanation of why Absa’s treatment of these amounts differs from the ordinary treatment of unpaid insurance premiums by standalone insurers.

7. Request for immediate account reconciliation and suspension of escalation

I formally request that Absa:

1. Provide me with a complete vehicle finance statement/account ledger showing every transaction, charge, insurance premium, interest charge, fee, payment and allocation from the date the insurance issue first arose to date.

2. Provide a complete breakdown of the alleged R24,000 outstanding amount, clearly separating:

* normal contractual instalments; * insurance premiums; * any amounts added to the principal debt; * interest; * collection fees; * legal/recovery fees, if any; * and any other charges.

3. Investigate and reconcile all insurance charges against the comprehensive insurance policy that I supp**** to Absa.

4. Reverse or appropriately adjust any insurance charges that were incorrectly app****, duplicated, continued after acceptable proof of alternative insurance was supp****, or otherwise do not comply with the terms of my finance agreement and applicable legislation.

5. Reverse or reassess any interest, fees or other charges that arose solely as a consequence of disputed or incorrectly app**** insurance amounts.

6. Confirm in writing whether my own comprehensive insurance was accepted and, if so, the effective date from which Absa’s insurance should have ceased.

7. Place the account on hold from further recovery escalation while this active complaint and disputed account calculation are being investigated, including placing a hold on any repossession action arising specifically from the disputed amount.

8. Confirm that the account will not be adversely escalated based solely on amounts currently under genuine dispute until the investigation and reconciliation have been completed.

9. Provide me with a clear amount that Absa considers undisputed and payable under the finance agreement, separate from any disputed insurance-related amounts.

8. I remain willing to pay the legitimate vehicle finance obligation

I want to make this absolutely clear:

I am not refusing to pay my vehicle finance instalments.

I understand my contractual obligation and I am willing to meet the legitimate amount due under the agreement.

My concern is that I cannot reasonably be expected to accept or pay an unexplained balance that includes disputed insurance-related charges which I have been attempting to resolve for months.

I have already demonstrated my willingness to make payment, including my attempt this week to pay R10,000 toward the account.

I am therefore requesting that Absa separate the legitimate vehicle finance obligation from the disputed insurance-related amounts and provide me with a transparent reconciliation so that I can understand precisely what is legitimately owing.

9. Service failure

I also formally record my dissatisfaction with the service received during this process.

I contacted multiple departments, was repeatedly transferred, experienced calls being dropped, repeatedly had to explain the same issue, and requested managerial assistance on numerous occasions without receiving the promised managerial call-back.

The fact that the matter remained unresolved for approximately three months despite my repeated attempts to obtain assistance is unacceptable.

I am particularly concerned that the account has now progressed to Recoveries while the very matter I repeatedly asked Absa to resolve remained unresolved internally.

This creates an extremely unfair situation for a customer who has actively attempted to resolve the issue.

10. Urgent request

Given that I have now been informed that the account has moved to Recoveries and that repossession has been raised, I request an urgent written response confirming:

* that this complaint has been formally recorded; * the complaint reference number; * the current status of the vehicle finance account; * whether any repossession instruction has been issued; * whether any legal/recovery action has commenced; * the current outstanding balance; * the undisputed contractual arrears; * the disputed insurance-related balance; * the exact nature of each insurance-related charge; * why those charges were carried forward into the account; * and that escalation will be placed on hold while the account is investigated and reconciled.

I expect this matter to be investigated using the actual account records, insurance records, payment history, correspondence and call history rather than a generic response.

I have made repeated good-faith attempts to resolve this matter and I am asking Absa to now provide the same level of accountability.

I look forward to receiving the full reconciliation and a substantive written response.

Kind regards,

Khaya