Great sofa - shame about the cover

Last August, my wife and I bought two sofas from Courts on a one-year interest-free option. This was a £1,204 credit arrangement with HFC Bank, paid through 12 small monthly instalments, with a lump sum payment at the end of the year.

Recently we received a statement noting an outstanding balance of £65.40 for credit protection insurance, which HFC said I had taken out with the original credit agreement. I checked the application form. There was no tick and I had written 'N/A' next to the box.

I had completed this form in the shop, where I was also given a personal loan voucher, completed by a Courts employee, which I signed, assuming it just repeated my application form. I now see that the insurance box on the voucher had been ticked.

I don't doubt for a minute that I was wrong not to be more vigilant in checking what I signed, but surely I am being askedto pay for someone else's error?
JM, London

HFC says the two forms refer to applications for two different types of credit, but the deal was that you took both. The form you completed yourself was for a Courts store card, which you threw away; the other, for the personal loan, had the ticked insurance box.

The salesman should have assumed you wanted identical conditions, or at least checked with you, but he earned no financial incentive by ticking the box on your behalf.

HFC is happy to accept that you did not want the insurance and has cancelled the policy. You have paid for the sofas in full, and will not get caught by interest charges.

AA membership: Unused cover

On 3 April, I sent a cheque for £75 to renew my AA membership, due at the end of April. But before the end of the month, I bought a new car that included three years' AA cover.

I asked for a refund but was told that subscriptions are accepted for 12 months' continuous membership and are not refundable. Can you help me obtain my £75, which I feel the AA is retaining on rather shaky arguments?
WB, Harrogate

Older AA membership cards show the exact day for renewal, but current ones indicate only the month and year. So, although you believed your subscription ran to the end of the month, the AA says it was due on 20 April, and you telephoned to cancel on the 28th.

The money would have been refunded if the year had not yet started, but no refunds are allowed once it has. The only consolation is that the AA defers the unused portion until you want to reactivate it, so you will get 358 unused days of the subscription at this year's rate, however much the fee has increased.

Cooling off: The cold reality

I took out an Aberdeen unit trust Isa for £5,000 but cancelled within the 14-day period. Instead of sending me back all the money, they have sent £4,382, pointing to other documen tation that contradicts the wording on the cancellation form: 'I require the return of any money paid to you ...which I am entitled to have returned.'
MR, Birmingham

This cancellation clause can be read two ways and Aberdeen's interpretation differs from yours.

You put emphasis on the word 'entitled' and believed you should get back all the money you paid over. Aberdeen emphasises the word 'which' and says you are entitled only to the lower price if units have fallen since you bought and your original investment if the price has risen. This is standard industry practice.

Children's funds: Perfect timing

Through my financial adviser, Willis National, I have put a few thousand pounds into the Mercury Global Titan fund in my name, but identified with the initials of my grandchild, aged six months.

The key features document says that, when I die, the value can be released only by a grant of probate. If this coincided with, say, a teenager going to college, the delay in obtaining cash could be disruptive. Is there a better long-term investment for a grandchild that can be added to without penalty and has tax advantages?
LT, Solihull

The risk of your dying just as your grandchild starts university in 18 years' time is remote enough not to worry about. Over such a long period, investments linked to stock markets are the best choice and, by designating the account with the child's name, you have already min imised income tax. The simplest alternative is to put the money entirely in the child's name, but you would lose control.

You could put some of the money in your wife's or another grandparent's name to spread the risk of one dying at a critical time. Otherwise, wait until the child reaches 15 and then move the money into a deposit account, perhaps a joint account with the child.

Banks and building societies will release accounts worth up to £5,000 without waiting for probate when a saver dies. Joint savings automatically go to the survivor.

Late mortgage? No worries

My wife and I own our own home, worth about £40,000. We would like to borrow £24,000 to move house. I am 57 and self-employed, earning about £14,000 a year. My wife will retire in two years' time, aged 60, with full state pension. Is it unrealistic to think we could get a mortgage for this additional money?
PK, Glasgow

You should have no problem. While your income is low, you are borrowing less than 2.5 times your salary and can put down a large deposit. Your age is not an issue as you are still working and could perhaps work beyond 65. In fact, you may find that £25,001 is the least you can borrow, as this is the starting point for most lenders.

A repayment loan is best as you do not have enough time for investments to grow substantially. Borrowing £25,001 at 6 per cent over 13 years costs £235 a month; over eight years £335.

• Write to Margaret Dibben, Money Writes, The Observer, 119 Farringdon Road, London EC1R 3ER and include a telephone number. Do not enclose SAEs or original documents. Letters are selected for publication and we cannot give personal replies. The newspaper accepts no legal responsibility for advice.