I tried to cancel a new car insurance policy with Carrot five days into the 14-day cooling-off period last December.

However, Carrot refused to let me because of an ongoing Cue check to verify my claims history, triggered when I applied because a third party had incorrectly named me as the driver in an accident. When the check was completed in my favour, and the incorrect information removed, I had gone beyond the cooling-off period.

Cancellation fees therefore amounted to nearly £350 when I was just over two weeks into an £800 policy – during which the car was not used – due to a mistake on a database. Carrot staff told me they could not reduce the amount as it’s automatically calculated.

JB, Ashton-under-Lyne

“Rewarding Insurance” is Carrot’s slogan. Your experience begs the question - who is reaping the rewards? The company’s stance is scandalous - cooling-off rights are enshrined in law and traders cannot prevaricate in order to run the clock down. Carrot’s reasoning was, in any case, absurd because if you were cancelling, the results of the Cue check would be irrelevant.

Unfortunately, Carrot only admitted its shortcomings when caught in the media spotlight. Suddenly weeks of intransigence turned to contrition. “The customer had a really poor experience,” it says. “What should have been a simple problem to solve took us longer than it should because of an issue with our process, which, in turn, prejudiced the financial outcome … we’ve implemented changes to ensure it does not happen again.”

You have been refunded a further £275, which is the 30% of the annual premium that’s withheld when customers cancel out of time, and the £35 cancellation fee has been waived.

If you need help email Anna Tims at your.problems@observer.co.uk or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number. Submission and publication are subject to our terms and conditions