Advice please on claiming back life insurance!!

FARROW_2

Hi, took out a mortgage in 2004 with GMAC in my name only but went through a company called the lifestyle mortgage centre as my credit history wasn't the greatest to apply through a bank. I was accepted with GMAC but was told by the mortgage centre that I had to take out life insurance for a min of 5 years with friends provident to cover myself and my partner (as they said I was financially dependable on him). Without the option I took this policy out in order to get the mortgage. Within those 5 years, I sold my property and split up with my partner. When I tried to cancel my policy lifestyle mortgage centre told me that if I cancelled I was liable to pay them back approx £750 (some kind of loss of commission rate). So I had to continue paying the monthly instalment to friends provident for the remainder of the 5 years even though I didn't have the intial mortagage and nor was I with my partner. To make matters worse, I tried changing the policy from my old partners name to my new one through friends prov and was advised that I would have to get a consent from my old partner to do this. My old partner at this time was living in Ireland dodging the CSA and I didn't have an address for him to do this. Let's just say I was relieved that I didn't die in this period as my old partner who was dodging paying CSA for my lovely 2 kids would of probably gained from my life insurance that I was bloody paying! What a rubbish system.
So basically what I want advice on, was this mis sold by lifestyle mortgages? Did I have an option of not taking life insurance out? and surely in certain circumstances like the above there should have been get out clause? If I had the balls I should of just stopped paying the insurance and then awaited lifestyle to take me to court for the £750 but at the time I didn't have a penny to do this.

dunstonh

So I had to continue paying the monthly instalment to friends provident for the remainder of the 5 years even though I didn't have the intial mortagage and nor was I with my partner.

No you didnt. You could cancel it but you would have been required to pay the fee instead.

was this mis sold by lifestyle mortgages?

Possibly. Possibly not.

If you agree to pay a fee for advice and it is agreed that the commission on product sales will cover that fee (i.e. commission offset) then that is quite acceptable as long as the commission equals the fee and a fee agreement exists.

If there is no fee agreement and the commission did not equal the fee (i.e. the firm said the fee was £500 and the commission kept was £800) then that is unfair to the consumer (potentially its fraud). Also, the FSA, under treating customers fairly guidelines (TCF) would consider a fee that matches a commission to be unfair (unless it is the rare case where a commission does happen to be exactly the same as the published fee rate).

So, in other words, if the fee was £500, they should take commission only to the value of £500. The fee should match their published terms and not be above that amount.

If you create a clawback by cancelling, then as long as the agreement exists saying you are liable for any difference then they have the right to come after for the difference. If no fee agreement exists, they have very little chance of success. Although some do huff and puff to try and scare you.

Did I have an option of not taking life insurance out?

Yes and no. No you didnt have to take the life assurance out. However, you would probably had to have paid a fee instead to cover it. So, as you had a financial need, that option was probably the most sensible option.

surely in certain circumstances like the above there should have been get out clause?

There was. You could cancel the policy and pay the fee instead.

If I had the balls I should of just stopped paying the insurance and then awaited lifestyle to take me to court for the £750 but at the time I didn't have a penny to do this.

If they had a fee agreement they would have taken you to court and your credit history would be blemished by having a CCJ against you.

So, in summary, if the firm did it correctly they are in the right. If they did it incorrectly they are in the wrong.

FARROW_2

Thank you you have been a great help