Critical illness for mortgage possible claim?

Money_Saving_Forever

Hi people,

In 2004 I was told by a Natwest mortgage advisor that I have to take out critical illness cover for a mortgage otherwise I would not get the mortgage. She quoted me and I said I will look elsewhere for a better deal. Went to an IFA who quoted me cheaper and so I took it out and told Natwest I am covered. For the life of me I cannot remember, but I think I took it out and cancelled the direct debit 6 months later (just so the mortgage would be approved). I have now realised that Natwest were lying to me in order for me to take out CIC with them. The IFA also did not tell me that I do not need any such cover to obtain a mortgage so I wonder if I have a claim?

Thanks in advance.

McKneff

Not really sure on thatone, you may have had a claim if you had stayed with the mortgage company and took it out but it may
be different if you went to another company voluntarily and took one out.

The second company hasnt done anything wrong

The first company may have lied but there would be no claim with them because they didnt sell you anything.

Maybe the experts will come along and tell you for definite.

dunstonh

The IFA also did not tell me that I do not need any such cover to obtain a mortgage so I wonder if I have a claim?

Not a chance in hell.
1 - you asked the IFA for it and you got what you asked for.
2 - A factfind, needs analysis and report would have been compiled. So, unless you had no financial need for CI cover then you have no grounds for complaint.
3 - You only have a verbal allegation against Natwest but you didnt proceed with them so there will be nothing to support your verbal allegation. So, an easy rejection.

magpiecottage

Since you did not actually buy a policy from NatWest, they will be able to argue that you did not act on their recommendation - so the complaint is frivolous and vexatious - in other words silly and malicious.

As far as the IFA is concerned, apart from the comments by DunstonH, a critical illness policy to cover a mortgage was not regulated in 2004 and did not fall under the GISC code, so FOS won't consider it.

Tasape

Hi
We remortgaged with Northen Rock,we used a Broker from Home bank to set it all up we were advised we needed Critical illness etc to aid us in getting thr mortgage,it was a joint policy cost 5040 for the term (Just Ended) we took the 5040 as an extra on the Mortgage so we could pay up front for it,we have now discovered that we were also paying the insurance provider as well 133 per month i am very confused as to what has happend should i seek legal advice on this or do i go thro the normal miss sold and do it my self,really need someone to look at all the paper work to see what has gone on as i'm getting confused by it all........

dunstonh

hould i seek legal advice on this

No. The law doesnt recognise single premium as being wrong. Its an FSA viewpoint.

You should have been set up the CI on monthly premium. So, complain to the firm that sold it to you. The rest of what you say is irrelevant unless you have proof to back it up.

Tasape

hi thanks for the reply it wasnt the fact that we paid up front,
but i have all the paperwork in a folder.

on the ppi miss selling will it be worth while chasing this,

dunstonh

Tasape wrote: »

hi thanks for the reply it wasnt the fact that we paid up front,
but i have all the paperwork in a folder.

on the ppi miss selling will it be worth while chasing this,

You have virtually no chance of success on a complaint on any other means. CI has no overlap with anything else. So, no complaint there. You have no evidence to support any verbal allegation (so easy to reject). They will have a factfind, needs analysis and report which should give it a good audit trail.

Single premium is considered bad as you could have paid for it monthly without interest being charged on it.

One other issue is that you mention broker. Regulation started in 2005. Was your before or after 2005?

stewy07

Hi, I had the same thing happen to me.

Took out a Mortgage with HSBC in 2004 and was told I needed Life/critical Illness Insurance seeing though I was Self Employed.

I was 24, Single and had no kids. There is no way I would have took that policy out unless I was made to feel I had to, enabling me to secure the mortgage.

I thought I'll look elsewhere. I wouldn't even have went If I didn't think it was compulsary. I cancelled the policy 4 years later.

I've just 'dug up' my Mortgage/Insurance etc.. and have found a proposed letter from HSBC (2004) basically saying

'It is on the conditon of your loan agreement that adequate building Insurance is in place for the duration of your loan'.

'We also remind you of the importance of ensuring adequate Life cover is maintained for the duration of your loan'

I believe I was given the wrong Information on Life insurance/critical Illness cover. Infact I know I was because I was in the room with the mortgage advisor .

Do I have a case?

dunstonh

Took out a Mortgage with HSBC in 2004 and was told I needed Life/critical Illness Insurance seeing though I was Self Employed.

CI cover makes sense. Life cover does not if you were single with no partner and living alone.

'It is on the conditon of your loan agreement that adequate building Insurance is in place for the duration of your loan'.

'We also remind you of the importance of ensuring adequate Life cover is maintained for the duration of your loan'

Perfectly sensible statements that you would expect a responsible lender to make. Nothing wrong with those.

I believe I was given the wrong Information on Life insurance/critical Illness cover. Infact I know I was because I was in the room with the mortgage advisor .

Do I have a case?

Based on what you have said and if you were living alone then the life cover part was likely mis-sold. Not the CI part.

stewy07

Thanks.

I have 2 HSBC letters asking for my signiture on the life cover which I ignored also. Basically pestering me into getting it.

Like I said I only took the policy out because they told me I needed it to obtain my mortgage.