BY ROB SHAW, VANCOUVER SUN
Car insurer says new policy will save $1 million annually in card processing fees
VICTORIA — B.C. drivers may no longer use their credit cards to pay for monthly basic auto insurance, as part of cost-saving changes at the Insurance Corp. of B.C.
The public auto insurer quietly introduced the new policy on Nov. 1, which forbids payment by credit card for customers who pay their insurance premiums via a monthly payment plan. Debit, cheques and cash are still acceptable.
“We made this change in an effort to reduce the costs associated with credit card payments and to ensure we can continue to offer an affordable payment plan program for customers who need it,” said ICBC spokesman Adam Grossman.
“Unfortunately, credit card payments result in merchant fees we are responsible for paying and we are continually looking at where we can better control our costs to help keep our rates as low as possible for all customers.”
ICBC projects it will save $1 million annually in card processing fees.
Customers who choose to pay their premiums as an annual lump sum (which can be in excess of $1,000, depending on the driver record) are still permitted to use credit cards.
The change will be a major inconvenience to some customers, and is the kind of thing ICBC can get away with only because the Crown agency has a monopoly on basic insurance and drivers can’t take their business elsewhere, said NDP critic Adrian Dix.
“What they are doing is making things harder for their customers and clearly, given what they say the fees are, a lot of their customers were using this method of payment,” Dix said.
ICBC may be claiming it needs to save money, but at the same time it has also wasted millions on projects that are over budget, such as a computer systems transformation initiative, Dix said.
The corporation says it has been cutting costs as it seeks to lower proposed basic rate hikes for motorists.
The government last month gave ICBC special permission to take $450 million from its optional insurance business and dump it onto basic rates, to bring down a proposed 6.7-per-cent increase in basic rates to 5.5 per cent.
Please note that ICBC’s twitter says that “Credit cards were never a monthly payment option. Prepayments or lump sum payments on credit r no longer allowed w/monthly plans” ^kp