Life insurance - clawback and cancelled contract

Fruitcake2015

We have the same situation at the moment and we aren't too sure what to do. We have just moved into our new home and was told we need to take life insurance out otherwise we will have a broker fee to pay if not. We took the life insurance out and received some documents from the life insurer when the policy had started claiming we had a 30 day cooling off period if we wished to cancel. We decided to cancel and now our mortgage advisor is saying we will get a bill for 1% of the mortgage amount because we have cancelled and due to us signing a 48 month life insurance policy. We never knew anything about this 48 month life insurance policy otherwise we would have never have signed up in the first place. This was never told to us when signing up and I can't find any piece of paperwork anywhere saying we had signed up to a contract for that long and nothing was ever mentioned to us about any fees if we cancel. We are now waiting to see if a bill does actually arrive and if it does I'm not sure what we will do. This is again through the MAB. I will never ever use these again!!! Any advice would be greatly appreciated.

Quentin

If you get a bill for the lost commission then ask for a copy of the agreement you signed permitting them to charge you.


Then take it from their reply, and if no agreement is forthcoming then don't pay!

dylanlawton

Have they sent you a copy of an agreement that you signed stating that you have entered into a contract? That's what they did with me as I had signed a contract, if they've not sent a copy then it sounds like you didn't sign anything, if so then it looks like you'll be ok. I'll never use them again either and have cancelled my remaining policies as they're far too focussed on commission and completely overdid it on the policy - I have a similar policy now at half the price I was paying through them.

magpiecottage

You should have received an initial disclosure document explaining the charges.

You should also have received a personal illustration which would have confirmed the commission paid to the insurer.

In addition, you should have received a similar confirmation with the letter from the insurer accepting the application and/or the "cooling off notice when it went into force. These would have been sent by the insurer not the broker.

If the broker was independent, rather than tied to a particular insurer, and they could have obtained identical cover from an insurer that was regulated by the Financial Services Authority/Financial Conduct Authority and/or the Prudential Regulation Authority at the time then that would be legitimate grounds for complaint against the broker.