Halifax Morgtage + House insurance PROBLEM

nate24nate

hi there

I am writing this on behalf of my parents:

Since 1990 they have been paying their morgatage and had their buildings andcontents house insurance within the mortgage. This resulted in each year theirhouse insurance being around £700 and this is what they have been paying forover 20 years.

The issue we have with this is that this year they have decided to goelsewhere and with advice taking from this AWSOME forum we have found them theexact same cover for their house at a cost of £100 for the year [a saving of£600]

What we are wondering is? Would there be a cause for complaint. We arethinking about writing a letter to the financial obs to complain. They were totallymissold the house insurance as they were told by Halifax that they had to havethis built in to the mortgage and then every year since Halifax has beencharging them £600 - 700 every year.

the other sting in the tail is that the money that should have been comingoff the house each year when they have been paying their mortgage, they weretold by a Halifax employee that the money that would have been coming off wasbeing used to pay the house insurance, so on rough calculations around £15k hasnot been taken off the house. If this was to be taken off the house mortgageproperly my parent’s house would now have been fully paid for...

I am sorry for the long winded message......

But please please please can someone help as I want to help my parents payfor their house and get everything sorted for them...

dacouch

It's more a case of miss bought rather than miss sold.

dunstonh

What we are wondering is? Would there be a cause for complaint.

No. Banks products are typically expensive. You dont buy from a bank to get best quality or best price.

Every year your parents were told the price and every year they chose to pay it. No mis-sale.

The issue we have with this is that this year they have decided to goelsewhere and with advice taking from this AWSOME forum we have found them theexact same cover for their house at a cost of £100 for the year [a saving of£600]

Whilst the banks are expensive, that doesnt sound like for like on their typical differences. £100 a year sounds stripped down to the bone cover whereas Halifax's cover is typically full works.

We arethinking about writing a letter to the financial obs to complain.

You havent given any grounds for complaint and cant go direct to the ombudsman either.

They were totallymissold the house insurance as they were told by Halifax that they had to havethis built in to the mortgage and then every year since Halifax has beencharging them £600 - 700 every year.

It is correct that they have to have house insurance. It is a mandatory requirement. That is not a mis-sale. Is it unlikely they can remember what they were told 22 years ago but even if they could, they cant prove it and it is actually quite possible that they did have to have their insurance back then. 1990 is before the days of internet comparisons and you could only buy your own insurance via brokers and the provider had to be on the bank acceptance list.

the other sting in the tail is that the money that should have been comingoff the house each year when they have been paying their mortgage, they weretold by a Halifax employee that the money that would have been coming off wasbeing used to pay the house insurance, so on rough calculations around £15k hasnot been taken off the house. If this was to be taken off the house mortgageproperly my parent’s house would now have been fully paid for...

That is not a sting in the tail. Its a bit like saying that if I didnt spend £10,000 a year at Tesco and paid it off my mortgage instead, my mortgage would be lower.

But please please please can someone help as I want to help my parents payfor their house and get everything sorted for them...

Whilst you think you are being helpful, i would suggest you first check the cover you have bought for them as I would be more concerned about them having very basic coverage now and not the level of cover they may expect or want. You may have mis-sold the cover to them. And that is the only potential mis-sale issue here.

opinions4u

You have three complaints.

1. They were told that the had to have insurance to get the mortgage.

2. They were charged too much for the insurance.

3. The premiums were debited to the mortgage account and not covered by standing order / direct debit payments.


The first one is doomed. It's a conversation from 22 years ago for a product that wasn't regulated at the time.

The second one is doomed. They were issued a renewal with a phone number and a premium on it year after year. Their choice to do nothing. Halifax policies from 1990 were usually sold with all add-ons included, adding to the price.

On the third matter you may get some mileage out of an ex-gratia payment in lieu of interest charged on the unpaid premiums. But you really shouldn't. The mortgage statements and renewal letters will have clearly shown what was being paid and what wasn't being paid. In addition, each time the payment has been recalculated (rate change etc) it will have been recalculated to clear the increase in debt over the remaining term. 22 years in there is no way £15,000 of insurance premiums will still be outstanding.

nate24nate

in reply to dunstonh the cover they now have is exactly LIKE for LIKE what they were paying £689 pound for [its an exact match]

in reply to opinions4u it was not a conversation 22 years ago [i did not state that] it was a conversationt hey had this year in janurary about their home insurance.

Surely for the money you pay in replayments towards your mortgage should not be used to pay off home insurance.

are you saying we do not have any leg to stand on. Not even to write a letter direct to the bank ?

would a letter to the finaical obs be wise ?

as on their part they were told what to do and they jsut did it, they were not given options at any stage over the last 22 years.

surely home insurane on a house thats only worth 80k would not be £600 - 700 a year.

i appreciate all your feedback.. and note that i am only trying to help my parents...

vshopper

I would reiterate what dunstonh said, check very very carefully the level of cover you are getting to make sure that it is as comprehensive as the original cover. Then when you have done that go back and check it again even more carefully. I cannot stress enough how different the levels of cover can be. The differences will not always be immediately evident - sometimes clauses can be hidden away where you might not expect to find them. In order to be certain that its exactly the same level of cover you need to read and compare the entire policy booklets from the very first word in them to the very last.

For example- some policies will not cover you for matching items. Not all policies will state this as clearly as you might expect. Sometimes, particularly for someone not well versed in insurance terminology, it can be very easy to miss the meaning of a clause and you really do need to know what you're looking at. Many people find out that their level of cover is not what they thought it was when it is too late. When the Insurance Company tell you to read your policy booklet, they really do mean READ it! Its no good relying on a summary sheet that cover the main points.

As far as the Halifax paying off the insurance instead of the mortgage is concerned, your parents would still owe the same amount of money if they had paid it off the main mortgage - they'd just owe all the insurance premiums and less on the mortgage instead of no insurance premiums and more on the mortgage. The bank have probably have allocated payments to the insurance part first as its possible that that part of the loan might have had a higher interest rate.

I don't honestly think you have any grounds for complaint whatsoever. Its unfortunately one of those situations where the financial institution provide the relevant information but the customer just doesn't really understand it/doesn't have time to think it all through properly/can't be bothered to read the letters and information. No criticism in that towards your parents because I think the vast majority of customers are probably like that - its just that it doesn't make it the banks fault.

dunstonh

in reply to dunstonh the cover they now have is exactly LIKE for LIKE what they were paying £689 pound for [its an exact match]

I am not confident of that. Halifax policies of that era were full accidental dmange, personal possesssions cover and other addons.

A policy costing £100 for buildings and contents will not be full coverage.

Surely for the money you pay in replayments towards your mortgage should not be used to pay off home insurance.

Many lenders offer this method. It makes no difference. e.g.
£100 to mortgage only and £20 for home insurance is £120.
£120 to mortgage to cover mortgage and home insurance is £120

are you saying we do not have any leg to stand on. Not even to write a letter direct to the bank ?

You havent identified any wrong doing.

would a letter to the finaical obs be wise ?

you cannot complain directly to the ombudsman.

as on their part they were told what to do and they jsut did it, they were not given options at any stage over the last 22 years.

They had the option to go elsewhere every year at renewal.

surely home insurane on a house thats only worth 80k would not be £600 - 700 a year.

Halifax wont be cheap. Banks never are. However, it is highly unlikely it would be as cheap as £100 on like for like basis either. Probably closer to £200-£250.

Price is not something you can complain about.

iQueen

Nat24nate

If you still believe that you have a case, you need to complain to the Halifax. Contact them for a copy of their complaints' procedure.

Conduct all discussions/negotiations in writing. Include all the details and figures, and keep copies of your correspondence and their responses. Do not discuss anything over the phione.

If you follow the proper complaints' procedure and do not receive satisfaction, within a reasonable time, then you can apply to the Ombudsman.

opinions4u

nate24nate wrote: »

in reply to opinions4u it was not a conversation 22 years ago [i did not state that] it was a conversationt hey had this year in janurary about their home insurance.

My apologies. It did read that way though.

Since 1990 they have been paying their morgatage and had their buildings andcontents house insurance within the mortgage ... They were totallymissold the house insurance as they were told by Halifax that they had to havethis built in to the mortgage

If, more recently, they've said you have to have insurance with them that's wrong. If all they've said is that your buildings must be insured, that's right.

Surely for the money you pay in replayments towards your mortgage should not be used to pay off home insurance.

Your home has to be insured. At that time Halifax charged the premium annually to the mortgage account. The monthly payment was typically increased by 1/12th of that premium. But many chose to pay annually as a lump sum. In this case they didn't pay the extra 1/12th.

If they did neither, their debt increased.

are you saying we do not have any leg to stand on. Not even to write a letter direct to the bank ?

You always have a right to complain. Be clear and concise and state what the problem is and what you want them to do about it.

would a letter to the finaical obs be wise ?

Not until you've exhausted Halifax's complaint procedure.

as on their part they were told what to do and they jsut did it, they were not given options at any stage over the last 22 years.

They had an annual renewal giving them options. That is a complaint that cannot succeed.

surely home insurane on a house thats only worth 80k would not be £600 - 700 a year.

It is what it is. Size of premium is not grounds for complaint.