Have the team got it wrong?

The advice given on this site states "The six year rule applies to active insurance, so a policy taken out 12 years ago but paid off five years ago was still active within the key six year period."
My brother was mis-sold insurance in 2004 when he signed up for double-glazing. Cover apparently ceased in January 2009 when he was 65, although repayments on the loan continued till January 2014. He submitted a claim in November 2012 but the insurers rejected it because it was outside the time limit. The Official Ombudsman agreed with the insurer, saying not only was my brother outside the 6-year limit but he was also outside a 3-year limit "when he should reasonably have known that he had cause to complain". Is the Ombudsman correct or does the advice on this site need amending?

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  • edited 3 April 2014 at 10:45AM
    dunstonhdunstonh Forumite
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    edited 3 April 2014 at 10:45AM
    The advice given on this site states "The six year rule applies to active insurance, so a policy taken out 12 years ago but paid off five years ago was still active within the key six year period."

    The 6 year rule referred to on this site is not actually a rule and it does not apply to regulations. They are talking about the data protection act. Companies are required to hold information no longer than is necessary and 6 years is a commonly used length for holding onto that data. Typically, it is 6 years from the end of the contract (or when debt is repaid, if earlier)

    It is not referring to regulatory dates or timebars that may exist.

    My brother was mis-sold insurance in 2004 when he signed up for double-glazing. Cover apparently ceased in January 2009 when he was 65, although repayments on the loan continued till January 2014. He submitted a claim in November 2012 but the insurers rejected it because it was outside the time limit. The Official Ombudsman agreed with the insurer, saying not only was my brother outside the 6-year limit but he was also outside a 3-year limit "when he should reasonably have known that he had cause to complain". Is the Ombudsman correct or does the advice on this site need amending?

    There are multiple issues here.

    1 - Its pre January 2005. It is unlikely the double glazing company was regulated in 2004. The FOS actually has no remit on this case as the firm is no longer trading and its pre-regulation. The insurer for some reason has got involved when it is the double-glazing company that has liability. Although in a very tiny number of cases that can happen where commercial agreements place ultimate liability elsewhere.
    2 - There is a 6 year and 3 year time bar rule. You have 6 years from the date of application or three years from being reasonably aware of an issue to make a complaint. Whichever is the later. The 6 year rule is rarely activated because the 3 year rule usually prevents it from applying. As cover ceased in 2009 whilst the debt continued and he would have been notified of that, he effectively had three years from that date to complain about it.

    So, in this case, he fails both as the 6 year rule and the 3 year rule. However, these timebar rules are not the "rules" that MSE is referring to.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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