If you’ve cancelled a car insurance policy mid-term with one of several insurers, you could be due a refund.
A system error between 2005 and 2011 meant some people received less than they were entitled to.
The insurers affected are Direct Line, Churchill, Tesco Personal Finance, Privilege, Brand Partners, Virgin, Pearl and Egg.
Normally when you cancel a car insurance policy mid-term, you’re entitled to get back the premiums you have paid, minus a charge for the number of days you received cover, as well as an administration fee.
But the system error meant some customers of Direct Line, and other brands it powers, were not refunded the correct amount.
Direct Line found the error in its internal systems during an audit in 2011 and informed the Financial Conduct Authority (FCA) regulator.
The glitch has since been fixed and Direct Line has been working with the FCA to ensure those impacted are informed and refunded correctly.
A Direct Line Group spokesperson said: "We are currently contacting affected customers to advise them of the arrangements for refunding the money owed to them."
Who is eligible?
If you were a customer of Direct Line, or one of the brands associated with the group between 2005 and 2011, and cancelled a car insurance policy and/or additional linked products like breakdown cover or motor legal protection, you might be in-line for a refund.
It’s not clear how many past or present customers are affected, but Direct Line says only a small number of car insurance customers cancel mid-term, and of these people a "small amount" were impacted.
It doesn't matter if you paid for your insurance on a monthly or annual basis.
However, if you made a claim on the policy, or a claim was made against you, you won’t be eligible for a refund, even if you cancelled mid-way through.
How to claim compensation
Customers impacted by the system error should get a pay-out of around £35.
The refund will include interest at 8% calculated per year on a pro-rata monthly basis.
Direct Line says it has been sending letters to customers hit by the system error and the final batch are due to go out in the next few weeks.
The money you get will be sent in the post by cheque and should arrive 10 to 20 days after your first letter about the refund.
If you don’t receive a letter, but think you should have, dig out the documents with the policy number you cancelled and get in touch with Direct Line on 0845 246 6315.