My car insurer, Swinton, rang me to ask if I wanted to renew my insurance. I said I wasn't sure, as I was planning to get a lease car through work in the autumn. Swinton said it wouldn't be a problem and I could easily cancel my policy. I asked if there would be a charge for cancellation and was told it would be "about £50", and if I took out the policy I would get a £60 bonus in October, which would cancel out the charge.

Once my lease car had been organised, I rang Swinton in late October to cancel my policy. The bonus had never arrived, despite my ringing to inquire about it (I was told it would come on the 17th). I was then told it would cost me £110 to cancel the policy and that even if I had had the bonus, it would have been recouped. The company took £110 out of my account, plus two payments of £7.99 for breakdown cover, within days of each other. I was also told I was supposed to "claim" the bonus; this was not mentioned in the original conversation.

I then received another letter telling me I owed Swinton another £210.47 to cover insurance payments. They wanted to take £35 a month out of my account. I cancelled the direct debit and have received a letter threatening me with debt recovery. I have no idea what this charge is for. LF, Hull

Somewhere along the line, there was a major communication breakdown on Swinton's part. You were being charged various amounts at different stages and becoming increasingly confused as to what all these charges were for.

The £110 you were charged was not, as you thought, a cancellation fee but covered the shortfall for the money you still owed Swinton at the time of cancellation. This should have been explained. The breakdown cover you were charged, you had asked for. Your confusion may have arisen because you received the first three months free. The following two £7.99 payments were to cover the next two months.

The bonus you mention should have been paid after you had had the policy for 90 days (as was explained to you) – but you had to redeem it within 30 days by phone. Swinton says you failed to redeem it but you say in your letter that you were not told you had to do this, and were even given a specific date when it would be paid to you.

The complication that lies behind the bulk of the charges arose because you had a scrape with another car, that you have admitted was your fault, two months before you cancelled your policy. When you came to cancel, you, and Swinton, were unaware that the other driver had decided to go ahead and make a claim against your insurance. This claim meant you were liable for the full insurance annual premium.

Swinton says if it had known about the claim at the time of cancellation, it would have advised you it was payable. The amount you would have owed at the time of cancellation would have increased by £210. So, although Swinton was within its rights to charge this fee, it acknowledges it would have been best practice to explain to you why the delayed reporting of the claim meant you had become liable for the full premium. As a gesture of goodwill, Swinton has waived the £210 demand.

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