Mis-sold Scottish Widows Level Term Assurance

PoTsyGirl74

I'm really looking for advice before I start a complaint formally with Lloyds TSB about what I believe is the mis-selling of a Scottish Widows Level Term Assurance Plan. Back in September 2004 I was invited to a financial review at a branch with my partner. We wanted to consolidate our existing debts that we had with Lloyds TSB and the advisors (there were 2 of them working together) were happy to provide me with a new loan agreement to do so.

When the option of PPI cover came up, I clearly remember the advisors telling us not to consider it, because it "isn't worth the paper it's written on", but that they could offer us a level term assurance plan that would cover us for life & critical illness instead.

I feel like we were mislead into thinking that they were somehow doing us a favour by selling us a 20 year plan, instead of taking Loan PPI. I've been paying £30+ a month for nearly 8 years for a policy that had a waiver of premiums on it, but when I rang up recently to inform them that I've had a long term chronic illness, since 2005 and I'd continued paying the premiums despite, I couldn't claim on the payment cover because I wasn't actually in work when I first became unwell. I'd relocated and had to leave my job because of that, so was already unemployed before becoming sick, so on that technicality was excluded from taking advantage of the WOP.

Long story short, I feel this policy was not sold in our best interests, and was just another way of selling a product to us purely for their commission. We were pressured into taking it under the guise that it was the preferred/recommended alternative to PPI.

Does anyone have any experience of the same, or have any advice on whether this is something worth raising a grievance about?

dunstonh

I feel like we were mislead into thinking that they were somehow doing us a favour by selling us a 20 year plan, instead of taking Loan PPI.

There is a pecking order to how protection should be viewed. PIMPSIO (or variations) Protection (i.e. life), Income, Mortgage protection, pensions, savings, investments, other.

Long story short, I feel this policy was not sold in our best interests, and was just another way of selling a product to us purely for their commission.

Problem is that it doesnt appear that way.

We were pressured into taking it under the guise that it was the preferred/recommended alternative to PPI.

It should be in addition to PPI or income protection but if it was down to a choice of the two, the life assurance is typically prioritised.

Does anyone have any experience of the same, or have any advice on whether this is something worth raising a grievance about?

It is an interesting complaint as it completely bucks the trend. You are complaining that you wanted to be sold PPI but instead were sold a product that was statistically more likely to be claimed on and more likely to pay out. Most people are complaining that they didnt want PPI. So, that makes you near unique.

Could you afford to pay life assurance and PPI or just one or the other? Nobody covers themselves for every eventuality. You cannot afford to do so. So, you pick and choose which is most likely and most important within your budget. is your complaint perhaps a little hindsight based?

PoTsyGirl74

dunstonh wrote: »

There is a pecking order to how protection should be viewed. PIMPSIO (or variations) Protection (i.e. life), Income, Mortgage protection, pensions, savings, investments, other.



Problem is that it doesnt appear that way.



It should be in addition to PPI or income protection but if it was down to a choice of the two, the life assurance is typically prioritised.



It is an interesting complaint as it completely bucks the trend. You are complaining that you wanted to be sold PPI but instead were sold a product that was statistically more likely to be claimed on and more likely to pay out. Most people are complaining that they didnt want PPI. So, that makes you near unique.

Could you afford to pay life assurance and PPI or just one or the other? Nobody covers themselves for every eventuality. You cannot afford to do so. So, you pick and choose which is most likely and most important within your budget. is your complaint perhaps a little hindsight based?

Hi dunstonh,

Thanks for taking the time to respond.

Just to clarify, the point is I didn't want to be sold anything. But was told I had to take the level term assurance or there would be no loan. I certainly wasn't looking for PPI to be added as a preference.

I was advised to take the SW plan, without a choice to find cover elsewhere, or indeed to have none at all. Surely I should have had an option?

Hindsight based maybe:o

ACG

Lloyds can only sell Scot Widows policies so they would never recommend anything else.

With regards to the loan (im presuming its a mortgage), does the paperwork say that you must have life insurance as part of the policy?

Its difficult to argue what was said when you have somthing different in writing.

PoTsyGirl74

ACG wrote: »

Lloyds can only sell Scot Widows policies so they would never recommend anything else.

With regards to the loan (im presuming its a mortgage), does the paperwork say that you must have life insurance as part of the policy?

Its difficult to argue what was said when you have somthing different in writing.

Thanks for commenting ACG

I understand Lloyds only sell products from Scottish Widows, but they didn't disclose that we could get cover elsewhere, should we have wanted to.

It wasn't a mortgage no, just a regular unsecured loan to consolidate debts myself & partner had with Lloyds TSB. We both had a loan each and I had a credit card to settle, so we were offered the chance to refinance the debt into 1 loan in my name. Neither of us owned any property or had any other debt. Didn't need life insurance, hence my argument that I think it was unfairly sold to us.

ACG

If thats the case i would say you could possibly argue that the loan was miss sold.

Why would they effectively transfer someone elses debt solely into your name?

I suppose you could also argue that the Life Insurance was potentially miss sold. There are exceptions though so its possibly not quite straightford.

PoTsyGirl74

ACG wrote: »

If thats the case i would say you could possibly argue that the loan was miss sold.

Why would they effectively transfer someone elses debt solely into your name?

I suppose you could also argue that the Life Insurance was potentially miss sold. There are exceptions though so its possibly not quite straightford.

OK, I never thought of it that way. They were perfectly happy to transfer my other half's debt onto a loan in my name. Thankfully, we are still together anyway, and the loan was settled less than a year later, so would you say it was irresponsible of them to refinance the debt in that way? and to sell a life product that really wasn't needed?

ACG

Im not sure to be honenst. Ive thought about this again, as there was no financial detriment (ie you are still together and you were not left with someone elses debt), then im not sure how much compensation if any you would receive. (Thats me just guessing really).

Life Insurance, you could argue either way....why do you need life insurance on a debt that would die with you?
The flip side to that is - if the other person were to die, you have part of his/her debt. You would no doubt be a bit p'eed off if he were to die and you were lumbered with it. So they have covered that issue.

The other thing is, its always cheaper to get life insurance while your younger and without any medical issues - so it could be seen that they were making sure you had cover in place before it increased in price or worse...you were unable to get cover at all.

I wouldnt want to argue this one either way - im sitting on the fence

I suppose if you feel that strongly against it, it could be worth a letter of complaint, but if they throw it out im not convinced i would be prepared to take it to the ombudsman.

dunstonh

I understand Lloyds only sell products from Scottish Widows, but they didn't disclose that we could get cover elsewhere, should we have wanted to.

There is and never has been any requirement for them to tell you that you can buy elsewhere. They are required to tell you that they are tied (and their disclosure document does that).

What you were told, and I don't doubt you as banks are notorious for verbal breaches, is very difficult to prove. Nothing will support you in any allegation of verbal wrongdoing. So, facts need to be looked at. On complaints like this, they would look to whether you needed it or not. If there was no financial need, then it would be upheld. if there was, you would expect a rejection.

PoTsyGirl74

ACG & dunstonh, I appreciate the advice and will think carefully before pursuing this. Interesting to get your take on it, and I will remain realistic with my expectations.

kingstreet

Is the issue the life & critical illness cover or the waiver?

On a £30 a month premium, the cost of the waiver is around 90p.

I suspect this will be an advised sale and LTSB will produce a factfind, illustration and demands & needs statement all signed by the applicants confirming the acceptance of the advice.

They may have couched the protection sale as a "review" or something similar and I'd be surprised if there's any mention of the loan in the protection recommendation.