Mortgage insurance

bucketfloozy

My mother-in-law took a mortgage out in 1996 (Jan) with Bank of scotland for 156 months. The first 6 months had a discount rate. The mortgage should have ended this December...... however, after investigation it still has 6 months. But the Insurance that runs along side it ended when the mortgage should have. Thay have had to go out and get additional cover for this period of 6 months. My mother-in-law has contested the issue and subsiquently has an apologising letter from the bank also explaining that in 1997 at the end of the 6 month discount period, the repayments were calculated for the rest of the loan period. The bank made an error and used a period of 156 months instead of 150. The payment are correct for this time scale, however it will have incurred extra interest for them and an additional insurance premium to cover them for the remaining period. The importance when initially setting up the mortgage was to finish as my father-in-law retired.... Which he has.
Can you please help. How should they approach this matter to get some compensation, at least to pay for there insurance at the very least??

dunstonh

How should they approach this matter to get some compensation, at least to pay for there insurance at the very least??

Compensation is for financial loss. No financial loss has occurred here.

You dont say what type of insurance it is but whatever it is, there will now be less than 6 months to the end of the mortgage so there is little point setting up any insurance.

caracal_77

bucketfloozy wrote: »

How should they approach this matter to get some compensation, at least to pay for there insurance at the very least??

Did you try asking the bank for compensation?

You can always file a complaint at the financial Ombudsman Service, to do that, go to :
http://www.financial-ombudsman.org.uk/consumer/complaints.htm

I'm thinking that if the bank made a mistake, the bank has to pay.:rolleyes:

dunstonh

Did you try asking the bank for compensation?

You can always file a complaint at the financial Ombudsman Service, to do that, go to :
http://www.financial-ombudsman.org.u...complaints.htm

I'm thinking that if the bank made a mistake, the bank has to pay.:rolleyes:

You cannot complain to the FOS without going through the complaints process from the bank and receiving a deadlock letter saying that if you dont agree with their outcome that you can go to the FOS.

Mistakes do not mean the bank has to pay unless there is a financial loss.

caracal_77

dunstonh wrote: »

You cannot complain to the FOS without going through the complaints process from the bank and receiving a deadlock letter saying that if you dont agree with their outcome that you can go to the FOS.

Mistakes do not mean the bank has to pay unless there is a financial loss.

dunstonh, I complained to the FOS without going through the bank complaint process, saying I don't believe in their process. I eventually settled it with the bank, but after complaining with the FOS, everything went very fast and I believe I got better compensation.
I believe that after contacting the FOS, you'll get better treatment (from my experience anyway).

My first statement was if he tried asking the bank for compensation.

dunstonh

dunstonh, I complained to the FOS without going through the bank complaint process, saying I don't believe in their process. I eventually settled it with the bank, but after complaining with the FOS, everything went very fast and I believe I got better compensation.

That is impossible. All the FOS do when they receive a complaint direct is forward the complaint on to the firm in question. If they acted on it without allowing the bank to review it first, it would breach the FSA complaints process rules and create a charge to the bank which they would be in their rights to reclaim.

The process on how to complain and what happens is on the FOS website http://www.financial-ombudsman.org.uk/consumer/complaints.htm

I believe that after contacting the FOS, you'll get better treatment (from my experience anyway).

That isnt reflected in anything in that we hear about the FOS. People do go to the FOS directly but they are given the standard response (would like to look at your complaint) and then htey just forward it on to the complaints team of the firm in question. All it does is add a week to the process.

feisty1

Quote: The importance when initially setting up the mortgage was to finish as my father-in-law retired.... Which he has. Quote:
bucketfloozy What you should be asking is, why is this mortgage running into retirement when nobody calculated whether or not this would be affordable once my father retired?

caracal_77

dunstonh wrote: »

That is impossible. All the FOS do when they receive a complaint direct is forward the complaint on to the firm in question. If they acted on it without allowing the bank to review it first, it would breach the FSA complaints process rules and create a charge to the bank which they would be in their rights to reclaim.

The process on how to complain and what happens is on the FOS website http://www.financial-ombudsman.org.uk/consumer/complaints.htm

That isnt reflected in anything in that we hear about the FOS. People do go to the FOS directly but they are given the standard response (would like to look at your complaint) and then htey just forward it on to the complaints team of the firm in question. All it does is add a week to the process.

dunstonh, I'll describe what I had as briefly as I can.

I opened an ISA with a bank (took them 3 months to open) and cancelled it after a few days. From this point on it took them more than 4 months to give me my money back. When they did, they said that I can contact them if I'm not satisfied, and have the option of the FOS. At this point I complained with the FOS. The FOS sent me a letter 2 weeks after saying that I didn't get a final response from the bank and that they (FOS) will ask the bank for a response in 14 days. A few days after got a call from the bank CR department, offering compensation (more than what I thought I'll get, basically doubled the money I used to open the account).

I feel that contacting the FOS got things sorted better and faster. My opinion is that once the FOS gets involved, it gets to a different level.

feisty1

caracal_77 wrote: »

dunstonh, I'll describe what I had as briefly as I can. II feel that contacting the FOS got things sorted better and faster. My opinion is that once the FOS gets involved, it gets to a different level.

I have to support dunstonh, what he documented is the process, as all of us advisers are very well aware of.

Anyhow, yr "system" worked well for you, congrats.

bucketfloozy

I believe the insurance is to cover repayment in case of death, loss of job etc. Even though it is only 6 months if something was to happen now (god forbit), the outstanding is a little more than their state pension can stretch to. Doesn't the extra interest they've paid... all be it for the 6 extra months get classed as financial loss?
When it was set up the bank stipulated they couldn't have the length of the mortgagae running into their retirement (much needed).... Now it is because of a banking error. And far harder to pay on a pension.

feisty1

bucketfloozy: this is why i am drawing to yr attention the fact it is running into retirement I would be challenging the bank about the mortgage & the insurance payments If this has been their error and taken yr father into retirement without his consent, this is a grave error.
For example If yr father's health had changed since he took out his insurance policy all those yrs ago and today he applied for a new policy, the premium on this would go by age & health

I understand from yr post they have taken out new insurance, but if only 6mths payments are left, what amount is this insurance for?