Life insurance - clawback and cancelled contract

dylanlawton

There are several things they've done wrong, rather than it being wrong in terms of what they're asking for - not contacted me after the direct debits were cancelled, sending letters that were time stamped incorrectly, claiming they've phoned me and haven't, emails that are completely inaccurate (from 4 different staff members!)...they're all loose and unprovable though I think and maybe not strong enough to win in their own right...


The sum they're asking for is the outstanding commission (specifically claw back) but the solicitors have just changed it to 1% of the mortgage, the value remains the same though which I've asked about...I never had the chance to pay within 30 days as the letter they sent was dated a month before they sent the letter (the stamp on the envelope)...they haven't explained why they did that, but again, probably getting hung up on it.

Quentin

If the amount you owe is the same figure as originally billed, but now referred to as the 1% of mortgage value, then that is in line with the agreement you signed (regarding late payment).


It doesn't sound as though their wrongdoing affects the validity of the agreement - maybe you forgot about the clawback when deciding to cancel??

dylanlawton

I wasn't even aware I'd signed and didn't even know about the basics here until I got the letter, I wouldn't have cancelled if I'd known this was going to happen, not a chance...you're right though Quentin, it doesn't affect the validity of the agreement but it just annoys me that a. I signed the agreement without any real guidance b. They have been pretty awful in dealing with this (I mean errors and lack of attention to detail, not necessarily impolite)...I'll see what comes back from the response but I may just have to pay and take it as a lesson learnt and move on...

Quentin

If you now accept you do owe the money, bear in mind that if you don't pay within the time allowed and they do proceed with court action their claim will be in excess of the current amount being asked (the cost of issuing the claim will be added).

dylanlawton

Quentin, fully aware hence the rush in asking for advice here, Friday is the day I have to sort it by.


I have the answer I want now which arrived this morning:


When the policy xxxxxxx arranged for you in 2011 was started on 7th September 2011 Legal & General paid a lump sum of £1738.46 to Mortgage Advice Bureau. This was paid to MAB with a 48 month indemnity period. This therefore means if at any time the policy is cancelled a commission claw back is applied to MAB reflecting the amount of premiums paid in total at the time of cancelation. To date, as you have maintained a number of 31 premiums Legal & General have clawed back the sum of £ 615.64, this sum reflects the remainder of the 48 month indemnity (17/48ths of original commission paid has now been clawed back). Although this is how they calculate the payment of commission paid/clawed back on any particular policy, once at least 38 premiums have been met, if the policy is cancelled after this time, Legal & General do not apply any claw back of commission therefore no loss is incurred by MAB and this is why the Fee Waiver you have signed confirms the following:

Does make sense to me now and pretty much don't have any argument I don't think - this is the first time I've seen this information and it isn't documented anywhere.


These guys know what they're doing - does anyone think that it's worth offering a settlement fee less than the value or is it just a waste of time?

Quentin

dylanlawton wrote: »

this is the first time I've seen this information and it isn't documented anywhere.


These guys know what they're doing - does anyone think that it's worth offering a settlement fee less than the value or is it just a waste of time?

You did get the opportunity to see it when you were given their contract to sign up with them!


As this has got to the (pre) legal stage, it's doubtful they are going to accept any offer - would you if you were owed money all this time??


Anyway there is no harm in trying. but don't give them the grounds for carrying out the legal action threatened - as posted, you will just end up having more to pay if they do issue a claim.

dylanlawton

I don't recall and genuinely would have asked if someone was getting £1700 of commission - no paperwork at all around this and it's taken this long for someone to show me the information...how would it have been presented? I've kept every scrap of paper and there's nothing!


I'm still dealing with MAB so I'll explain that I want to offer less and the reasons and I'll see what they say - no harm in trying as you say...I won't let it go too far as it's just unknown territory for me and don't have a strong case now all the information is out, the peripheral issues won't win a case!

Quentin

Sorry - thought you were saying it was the first you knew about clawback having to be paid if you cancelled early.


As you have been told by MAB, you don't have the "right" to know how much commission was paid, so it's not an argument you can now use to say you wouldn't have bought the product.


(you were clearly happy at the time of purchase)

dylanlawton

Agreed, one thing I've learnt here is that I'll never go through a broker again for a product like this - not sure there are any advantages for me, the technicalities aren't difficult to understand and seems to be more sales focussed than actually suiting what the customer wants. My fault though, was naïve here and will move on...


Thanks for the guidance everyone, will get the cheque book out later today...

dylanlawton

Ended about as well as it could, they accepted a £300 offer...can't really complain.


Cheers to all who contributed.