Special Conditions - indemnity insurance

rsa

In 1986 I took out a mortgage and was told as I did not have a big enough deposit so i had to take out indemnity insurance. This was stated in a special conditions document, which I still have. It was no insurance, no mortgage.

Does this sound like an insurance covered under the miss selling umbrella?

I approached the bank and keep getting knocked back. I still have the bank account statements for my then current account and mortgage account, a copy of the special conditions document sign, stamped and dated by the bank. Copies have been sent to the bank with my claim.

Any advice will be appreciated.
Thanks

[Deleted User]

Mortgage indemnity insurance (MIG) is not something you can complain about because it WAS a condition of a mortgage where the purchaser was deemed a risk. The insurance was to cover the lender, not the customer. It would have allowed you to receive a mortgage where otherwise you would have been denied.

The alternative would have been to save more of a deposit before applying..


A simple Google search of what Indemnity Insurance is would have saved you (and the Bank) a lot of time "knocking back" your futile complaints.

http://www.home.co.uk/guides/mortgage_glossary.htm?mig

Otherwise, on what basis are you complaining?

magpiecottage

Another one!

This is a policy which mortgage lenders took out to protect themselves if a borrower wanted to borrow more than their normal maximum. The policy was not sold to you - the lender was the policyholder.

However, since it was doing you a favour, by permitting you to borrow more, it is reasonable that you should meet the costs it incurred in doing so. If it was only willing to lend if that policy was put in place then you should pay for it.

That is no different, for example, to borrowing a friend's car and them asking you to meet the additional insurance premium they incur.

So it is not misselling at all.

If you wish to complain to the Financial Ombudsman Service you can but it is likely to refuse to investigate it on the grounds that making you pay for the policy was an exercise of legitimate commercial judgement on its part.

If is also quite possible that FOS has no jurisdiction because the Banking Ombudsman scheme only came into existence in 1986 so if the loan predates the actual start date, it may not.

The loan definitely predates the Building Societies Ombudsman scheme which only started in 1987.

Most mortgages in 1986 were made by building societies - even if many are now banks. Halifax, Abbey National, Alliance & Leicester and Cheltenham & Gloucester, for example were all building societies then.

antrobus

magpiecottage wrote: »

...If is also quite possible that FOS has no jurisdiction because the Banking Ombudsman scheme only came into existence in 1986 so if the loan predates the actual start date, it may not.

The loan definitely predates the Building Societies Ombudsman scheme which only started in 1987....

As far as the Building Societies Ombudsman was concerned;

In his 1994-95 annual report, the Ombudsman said he could not investigate complaints about mortgage indemnity guarantees because a borrower is not usually a party to the actual policy, despite paying for it.

http://www.independent.co.uk/news/business/into-a-den-of-indemnity-1325023.html

I can't imagine that any other ombudsman would come to a different conclusion.

[Deleted User]

magpiecottage wrote: »

Another one!

Yes, clearly someone who saw the word "insurance" on an old statement and thought it was easy money to have refunded.

People need to realise that insurance is not always mis-sold, nor are policies refunded simply because they haven't been claimed upon.

In this case, MIG doesn't even cover the customer!

roonaldo

If you didn't want to pay it you should have got a smaller mortgage, or go elsewhere for the mortgage. Simples.

magpiecottage

roonaldo wrote: »

If you didn't want to pay it you should have got a smaller mortgage, or go elsewhere for the mortgage. Simples.

At the time, that would have almost certainly meant Nationwide Building Society who instead charged extra interest over the first year. This gave a higher headline monthly cost although once paid it was done forever - and at the time there was tax relief on the interest.