Will the DVLA elect to charge insurers for license checks?

The Driver, Vehicle and Licensing Agencies’ delay of its decision over the introduction of a new fee structure for license checks is welcome news for insurers and brokers, even if it proves only a temporary respite.

In March last year, the agency announced that it planned to charge insurers and brokers £4 for online and £6 for verbal and paper-based queries it received. By its own estimation, it receives a million such requests a year from individuals and companies, so it is easy to see why insurers see the move as a revenue generating ploy.

That the DVLA will not disclose its methodology for charging the fees does not help.

But the wider issue could be the potential escalation in license fraud and uninsured driving in the event that the DVLA elects to charge parties to use its service. This will amount to much more than lunch money.

For now the various industry stakeholders, including Biba, the ABI and the LMA, are focused on the pricing question. They argue that the introduction of such a cost regime would be economically unsustainable for their members.

In a recent letter to the DVLA, also forwarded to The Treasury, Biba called for the agency to justify its proposed pricing model, and insisted that online enquires be made free, with provisions for volume discounts for bulk enquiries.

In response, a letter to Biba on Tuesday from the DVLA said it was waiting for the conclusion of its pilot, which utilises rates of £2.50, before making its decision. It said: “The final decision on what level to set the driving license checking fee has been postponed until we have reviewed the future of all the enquiry channels and we have evaluated the outcome of the pilot.”

Biba is to meet with the DVLA over the coming weeks, at the request of the agency, which is a promising sign.

Less promising, however, the letter also suggested (albeit in a typically vague way) that the DVLA was not likely to budge on charges: “A prime requirement, and one that we cannot ignore, is that the fee for the on-line service must cover the full cost of the service in line with HM Treasury guidelines.”

It seems, then, that there will be a fee. The question is how much?