Unauthorised cancellation of policy

ntokmetz

Hello,
I would like your expert views on an issue.
My husband had a mortgage protection policy with Abbey (now Santander). Back in 2012 he switched banks from Coop to HSBC. We received a letter from HSBC confirming all direct debits had been successfully transferred so we thought all was OK. However, when he was made in redundant in July 2014 and wanted to use policy, we realised it had been cancelled back in March 2012 and when we contacted Santander to find out what had happened, we were told that they tried to take payment on the month of the bank switch and they couldn't so they cancelled the policy.
They claim they sent us a letter - which we never received - and that they tried to call us but the number we had given them was the wrong number, so failing those they cancelled our policy.
The number they called was my husband's family home where he hadn't lived since 1997. However, both his mum and his brother who live there have accounts with Santander and the exact same initials and surname. Therefore we believe they actually tried to contact the wrong account holder.
All 3 banks refuse any responsibility claiming they did what they were supposed to do and Santander didn't even want to listen when we tried to explain that they did not contact the correct account holder, and referred us to the Financial Ombundsman.
Admittedly it is our (well, his!) fault for not noticing the policy payments missing from his statements but he didn't have reason to think they would. It was only when we came to need the policy and wanted to use it that we realised what had happened.
Do you think we have a case for compensation and should therefore contact the Ombundsman, or would it be a waste of time?
(Sorry for the lengthy post!)
Many thanks!

dunstonh

We received a letter from HSBC confirming all direct debits had been successfully transferred so we thought all was OK.

Transferring of direct debits is often an issue. The mandate may show transferred at the bank but it is no guarantee of success as the originator controls the payments. Not the bank.

when we contacted Santander to find out what had happened, we were told that they tried to take payment on the month of the bank switch and they couldn't so they cancelled the policy.

It wouldnt have just been that. The insurer would also have written to say the payment had failed to give a chance to pay and again when payment never arrived to say the policy would be cancelled. Sometimes you get notifications 3 or 4 times.

Admittedly it is our (well, his!) fault for not noticing the policy payments missing from his statements but he didn't have reason to think they would.

Not being in control of your finances does mean that errors/problems can get missed until much later.

Do you think we have a case for compensation and should therefore contact the Ombundsman, or would it be a waste of time?

If every bank/insurer has done as they said, then no-one is at fault.

it may be worth asking the insurer if they were notified of the bank transfer. If they did, they would either have received details or sent you a new mandate. The fact they say payment bounced indicates they didnt know. Also, when the payment bounced, it would have been rejected with a code that indicates that it was a bank transfer. That is unless you cancelled the mandates at the old bank (which sometimes people do and they shouldnt).

I think at this stage, you need to find out where the fault is and complain to the one that failed. Complaining to the wrong one will mean you having to keep having to complain to each one until you find the one that is responsible.

ntokmetz

Thank you very much for your reply and the information, it is very helpful.
We may have to write to the financial Ombundsman and get them to investigate, as we have been contacting all 3 banks to try to find out who is at fault but each one was blaming the other one so we couldn't get anywhere.
Santander did say they tried to write to us and produced a copy of the supposed letter but we never received a letter from them. The copy didn't even have the bank's letterhead and as far as we are concerned it could have been written at any point... I had accounts with Santander before and customer service and general admin were awful... And the fact that they actually contacted the wrong account holder for this issue is proof of that?

dunstonh

Santander did say they tried to write to us and produced a copy of the supposed letter but we never received a letter from them

The FOS will accept that the letter went out and was received.

The copy didn't even have the bank's letterhead and as far as we are concerned it could have been written at any point...

Copies dont have to have letterhead as they are not printed onto headed paper until they are formally printed.

And the fact that they actually contacted the wrong account holder for this issue is proof of that?

No

ntokmetz

oh :-(
Thank you very much for the info

dunstonh

Still refer it to the FOS as it is possible someone has messed up somewhere.

ntokmetz

Yes, we will do.
We have nothing to lose!
Thank you very much for your help