The AA and RAC will pay a combined total of £15 million compensation to motorists who paid twice for breakdown cover, it has been revealed.
The motoring organisations will pour millions into the compensation schemes after it came to light that thousands of drivers were members of the breakdown organisations, but also paying for the same cover via their bank accounts.
The AA said today that it was in the process of contacting 17,000 of its 3.3 million members who purchased duplicate cover when signing up to current account packages supplied by Lloyds Bank and TSB.
The motoring association has allocated £10 million to compensate the drivers, after discovering the error last year.
A spokesperson for the AA said: “We are aware that there is some duplication of roadside assistance cover taken by a limited number of business-to-business customers who are personal members and hold added value accounts with our banking partners.
“Through the review of data for the new Customer Relationship Management systems, we have identified a group of customers for whom the benefit of holding both forms of cover is not clear.
“We proposed a programme of remediation for them which has the support of the regulatory authority. We have provided £10m for our estimate of the costs.”
However, he added that some of the customers had refused the compensation and had chosen to remain as members of the AA, despite being adequately covered through their banks.
“While some may be unaware that they have duplicate cover, others choose to maintain this to receive the benefits of membership,” he said.
The RAC recently released a document which revealed that it had set aside £5 million for a ‘correction programme’ to be implemented within 18 months.
It is unknown how many of its 8.6 million members were affected.
An RAC spokesman said: “We have identified a small number of members who chose to purchase membership directly from us, and also have cover with us via their bank account. We reported this in our 2016 full year accounts.
“We ask customers if they already have any other breakdown cover with us when they join, and communicate with them to remind them of the cover provided.
“We are contacting the relevant members to draw this to their attention and to double-check that their cover is still appropriate to their needs – as it is for many.”