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  • FIRST POST
    • Cotta
    • By Cotta 10th Jan 18, 3:54 PM
    • 2,546Posts
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    Cotta
    Histroric Insurance with Mortgage
    • #1
    • 10th Jan 18, 3:54 PM
    Histroric Insurance with Mortgage 10th Jan 18 at 3:54 PM
    Hi All,

    In my younger days, long before I became aware of MSE I took out a mortgage (in and around 2010). At the time the bank insisted that I must purchase their insurance that was underwritten by Liverpool Victoria. It was for critical illness cover, I advised strongly that I did not want this but the bank insisted it was purchased before I had my mortgage approved. Whilst the costs were not massive it was an extra £100 per month that I had to pay and this went out for four years.

    I recently asked my bank at renewal why I no longer had to take out these insurance packages, only to be told the bank have nothing more to do with those policies based on how they were sold and their validity.

    This got me interested so last year I queried this policy, the bank denied they sold it to me so I contacted Liverpool Victoria directly who advised that it seems to have been sold by a third party intermediary. Today after a year it appears that the policy was indeed sold by the bank directly but the bank are unsure how this came about and why as such sales look highly unregulated. There does also seem to be some evidence that I took out the policy at the time "very much under protest".

    I know this is very rambling, however have I any right to ask for a refund?
Page 1
    • YHM
    • By YHM 10th Jan 18, 4:07 PM
    • 439 Posts
    • 154 Thanks
    YHM
    • #2
    • 10th Jan 18, 4:07 PM
    • #2
    • 10th Jan 18, 4:07 PM
    Why a refund? Say you contracted a condition that were covered on the policy and it paid off your full mortgage, would you be complaining then?

    What evidence can you pull together that says you were coerced into taking insurance?
    I am a Mortgage Broker.

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice
    • Cotta
    • By Cotta 10th Jan 18, 4:09 PM
    • 2,546 Posts
    • 995 Thanks
    Cotta
    • #3
    • 10th Jan 18, 4:09 PM
    • #3
    • 10th Jan 18, 4:09 PM
    Why a refund? Say you contracted a condition that were covered on the policy and it paid off your full mortgage, would you be complaining then?

    What evidence can you pull together that says you were coerced into taking insurance?
    Originally posted by YHM
    I had insurance for such already elsewhere, the bank insisted it should be with them.
    • ACG
    • By ACG 10th Jan 18, 4:11 PM
    • 16,110 Posts
    • 8,286 Thanks
    ACG
    • #4
    • 10th Jan 18, 4:11 PM
    • #4
    • 10th Jan 18, 4:11 PM
    You would need to complain to whoever sold the policy. LV will/should know who sold it.

    You can make a complaint in writing to the company that sold the policy. They will investigate and let you know the outcome. If unhappy, you can then take your complaint to the ombudsman.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • kingstreet
    • By kingstreet 10th Jan 18, 4:12 PM
    • 32,612 Posts
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    kingstreet
    • #5
    • 10th Jan 18, 4:12 PM
    • #5
    • 10th Jan 18, 4:12 PM
    In 2010 such sales were FSA (now FCA) regulated.

    You should make a complaint to the organisation which sold/advised and allow them to investigate the complaint. They have eight weeks to investigate before providing you with a final outcome.

    If you are unhappy with that, you can escalate the matter to the FOS where he decision is binding on the firm concerned.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Cotta
    • By Cotta 11th Jan 18, 10:50 AM
    • 2,546 Posts
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    Cotta
    • #6
    • 11th Jan 18, 10:50 AM
    • #6
    • 11th Jan 18, 10:50 AM
    The bank are looking into it now, I felt it was better to ask the question rather than do nothing.
    • Cotta
    • By Cotta 19th Jan 18, 12:59 PM
    • 2,546 Posts
    • 995 Thanks
    Cotta
    • #7
    • 19th Jan 18, 12:59 PM
    • #7
    • 19th Jan 18, 12:59 PM
    The bank have denied any knowledge of the insurance policy, the insurance company that the policy was with have confirmed it was sold from the bank through and IFA. The IFA was an employee of the bank, the bank have conceded this is highly unusual and don't understand what has happened on their side - the investigation continues.
    • dunstonh
    • By dunstonh 19th Jan 18, 1:33 PM
    • 90,375 Posts
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    dunstonh
    • #8
    • 19th Jan 18, 1:33 PM
    • #8
    • 19th Jan 18, 1:33 PM
    At the time the bank insisted that I must purchase their insurance that was underwritten by Liverpool Victoria.
    Which bank? I wasnt aware LV had a tied relationship with any of the banks.

    I recently asked my bank at renewal why I no longer had to take out these insurance packages, only to be told the bank have nothing more to do with those policies based on how they were sold and their validity.
    The retail distribution review came into effect on 1st Jan 2013 and most banks pulled out of the advice market at that point. Some maintained an insurance only salesforce whilst others called it a day altogether.

    This got me interested so last year I queried this policy, the bank denied they sold it to me so I contacted Liverpool Victoria directly who advised that it seems to have been sold by a third party intermediary.
    Which makes sense given my earlier comment.

    Today after a year it appears that the policy was indeed sold by the bank directly but the bank are unsure how this came about and why as such sales look highly unregulated.
    Which then brings us back to square one. Regulation of insurance started in Jan 2005. However, the bank can only sell from the provider it is linked to (banks were virtually all tied agents and not IFAs).

    There does also seem to be some evidence that I took out the policy at the time "very much under protest".
    What evidence?


    The bank have denied any knowledge of the insurance policy, the insurance company that the policy was with have confirmed it was sold from the bank through and IFA.
    Which bank? There were only a handful that had an IFA service or multi-tied offering.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Cotta
    • By Cotta 19th Jan 18, 2:53 PM
    • 2,546 Posts
    • 995 Thanks
    Cotta
    • #9
    • 19th Jan 18, 2:53 PM
    • #9
    • 19th Jan 18, 2:53 PM
    Which bank? I wasnt aware LV had a tied relationship with any of the banks.


    The retail distribution review came into effect on 1st Jan 2013 and most banks pulled out of the advice market at that point. Some maintained an insurance only salesforce whilst others called it a day altogether.



    Which makes sense given my earlier comment.



    Which then brings us back to square one. Regulation of insurance started in Jan 2005. However, the bank can only sell from the provider it is linked to (banks were virtually all tied agents and not IFAs).



    What evidence?




    Which bank? There were only a handful that had an IFA service or multi-tied offering.
    Originally posted by dunstonh

    Bank of Ireland, the product seems to have been sold by their employee on behalf of an IFA.


    The evidence appears to be in the form of emails I sent at the time protesting the sale and advising that I did not want it.
    • dunstonh
    • By dunstonh 19th Jan 18, 3:08 PM
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    dunstonh
    Bank of Ireland, the product seems to have been sold by their employee on behalf of an IFA.
    ahh. Not a bank I have much knowledge of. Most of the banks tied themselves to a single provider. Usually L&G, Aviva, Scot Widows etc. Not a small, niche player like LV.

    The IFA takes the liability for sales made through their agency. Even if they involved third parties.

    In the past, I have sat in a building society branch and put in place products despite not being an employee of the building society. Once upon a time, that was very common. It's virtually unheard of nowadays and I haven't done it since the 90s. In 2010 you would not expect it.

    This is a most strange scenario you describe.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Cotta
    • By Cotta 19th Jan 18, 3:18 PM
    • 2,546 Posts
    • 995 Thanks
    Cotta
    ahh. Not a bank I have much knowledge of. Most of the banks tied themselves to a single provider. Usually L&G, Aviva, Scot Widows etc. Not a small, niche player like LV.

    The IFA takes the liability for sales made through their agency. Even if they involved third parties.

    In the past, I have sat in a building society branch and put in place products despite not being an employee of the building society. Once upon a time, that was very common. It's virtually unheard of nowadays and I haven't done it since the 90s. In 2010 you would not expect it.

    This is a most strange scenario you describe.
    Originally posted by dunstonh

    The investigating officer from the bank has stated the same as you, in fact it's taken many month to even find this policy.


    What could have happened and what could I expect as a potential outcome?
    • dunstonh
    • By dunstonh 19th Jan 18, 3:44 PM
    • 90,375 Posts
    • 57,163 Thanks
    dunstonh
    What could have happened and what could I expect as a potential outcome?
    Given the strangeness of the scenario, it is really difficult to say.

    However, maybe the staff member was leaving the bank to work for that IFA and decided to use them instead of the bank product (IFA product would be cheaper and frequently better quality). Or maybe they didnt have a bank product that met your requirements and the staff member got a local IFA to do it (not common but I had Barclays ring me last year to do something on one of their customers as they couldnt do it).

    Whatever the circumstances were that caused it to happen, the fact it went through an agency of an IFA means that IFA is liable for the advice they gave. However, the IFA not liable for the advice given by a third party. Especially if the IFA didnt know the advice was even being given. The staff member may well have been paying you and playing the IFA. The bank is only responsible for the actions of their staff member.

    I'm looking forward to you keeping us updated and well done on getting such a weird scenario!!!!
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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