Mis-sold Legal & General policy - broker dissolved?

astralbee

Help!

I think I may have been mis-sold a life insurance policy in 2006. It may have included PPI, possibly a 'Plevin' case of excessive commission. All I know is that I was paying £70 odd, then when I discovered MSE I used a comparison site to get the same policy for £7 with the same company!

The policy was with Legal & General and they have always been really helpful. Back in 2006 they told me that the reason I was paying £70 for a £7 policy was because I had taken it through a broker and they were getting commission. When I called them today they again were fairly helpful telling me the policy number, but they told me that I would have to claim off the broker. Trouble is, when I looked up the broker I found that the limited company dissolved in 2013.

My questions are:

1. Are Legal & General correct in advising me that I can't claim from them?
2. If so, how can I claim from a company that is dissolved*?
3. Is there anyone else I could claim from?

* the one extra piece of info I should add is that the broker Complete Move Mortgages LTD was recommended to me by the estate agent Farrell Heyworth who are still an active company. When I look up Complete Move on Company House I see that they were previously known as Farrell Heyworth Mortgage Services LTD so they were clearly sister companies.

HappyHarry

astralbee wrote: »

Help!

I think I may have been mis-sold a life insurance policy in 2006. It may have included PPI, possibly a 'Plevin' case of excessive commission. All I know is that I was paying £70 odd, then when I discovered MSE I used a comparison site to get the same policy for £7 with the same company!

The policy was with Legal & General and they have always been really helpful. Back in 2006 they told me that the reason I was paying £70 for a £7 policy was because I had taken it through a broker and they were getting commission. When I called them today they again were fairly helpful telling me the policy number, but they told me that I would have to claim off the broker. Trouble is, when I looked up the broker I found that the limited company dissolved in 2013.

My questions are:

1. Are Legal & General correct in advising me that I can't claim from them?
2. If so, how can I claim from a company that is dissolved*?
3. Is there anyone else I could claim from?

* the one extra piece of info I should add is that the broker Complete Move Mortgages LTD was recommended to me by the estate agent Farrell Heyworth who are still an active company. When I look up Complete Move on Company House I see that they were previously known as Farrell Heyworth Mortgage Services LTD so they were clearly sister companies.

Life assurance doesn't include PPI, and Plevin doesn't apply to Life assurance.

In 2006, a £7 per month policy being increased to £70 per month to pay commission would be unheard of (certainly via L&G).

I would guess you are not comparing like for like on the policies.

Does your existing policy include Critical Illness Cover? That might explain the difference in premiums.

dunstonh

I think I may have been mis-sold a life insurance policy in 2006.

That would be rare. It can happen but stats indicate it is unusual.

It may have included PPI, possibly a 'Plevin' case of excessive commission.

Life assurance cannot have PPI on it. Plevin does not apply to any insurance other than PPI. PPI can be included on a segmented plan but that would not be part of the life asurance but a segment of its own.

All I know is that I was paying £70 odd, then when I discovered MSE I used a comparison site to get the same policy for £7 with the same company!

Then you are not comparing like for like. You expect bank arranged policies to be more expensive or tied agent sold policies to be more expesnive. IFAs and whole of market mortgage brokers will be cheaper by around 20%. However, comparison sites will only be cheaper by around 15%-25% of IFA pricing.

The level of difference you are talking about is not like for like. It means you have left at least one thing off. For example, not including critical illness cover (that is most common based on simimilar past posts).

Are Legal & General correct in advising me that I can't claim from them?

You can claim on an L&G policy if you have a claim. However, they are not liable for any complaint about the sale as they didnt sell it.

If so, how can I claim from a company that is dissolved*?

You cant. If the company has gone then its gone. You have access to the FSCS though as it was bought after 14th January 2005.


You havent actually mentioned what your complaint reasons are. Size of premium is not a valid complaint reason and given that you almost certainly have not replaced it with the same level of benefit, a complaint would be destined to fail. its a bit like complaining that a BMW 3 series is more expensive than a FIAT 500. Even if you bought exactly the same product and features and the second place was cheaper, you cant complain about that as retail pricing is not a cartel and its L&G that set their pricing through different distribution channels and the firms themselves have only a small amount of play in the premium after that.

So, why do you think you were missold as nothing you have said so far indicates you were.

astralbee

Life assurance cannot have PPI on it. Plevin does not apply to any insurance other than PPI. PPI can be included on a segmented plan but that would not be part of the life asurance but a segment of its own.

Ok that's really helpful, thank you.

you are not comparing like for like. You expect bank arranged policies to be more expensive or tied agent sold policies to be more expesnive. IFAs and whole of market mortgage brokers will be cheaper by around 20%. However, comparison sites will only be cheaper by around 15%-25% of IFA pricing.

I believe that I am comparing like for like. The difference between £7 and £70 is more than 15%-25%. And I mentioned in my post the reason L&G gave me for the difference in price when I called them in 2006. They told me that the broker was getting commission. I cancelled the policy on the same phone call and took a new policy out online. Within a few days I received a telephone call from the brokers telling me that by cancelling the policy I had breached their terms and conditions. They were getting ongoing commission payments from the policy. I told them that I had merely called my insurer, asked them if I could cancel the policy, and they had told me "yes", so they should take it up with L&G. I never heard from the brokers again.

You can claim on an L&G policy if you have a claim. However, they are not liable for any complaint about the sale as they didnt sell it.

Thank you, that answers one of my questions.

You havent actually mentioned what your complaint reasons are.

Basically being sold a policy that appears to have had £63 a month commission payments added on. I trusted the broker because he was an independent, fees-free, whole-of-market mortgage adviser, just like MSE advised to use. He got me a good mortgage, then whilst in my living room offered to sort my life cover out as well. He told me it was a good policy, I just signed some forms.

Size of premium is not a valid complaint reason and given that you almost certainly have not replaced it with the same level of benefit, a complaint would be destined to fail.

But it really was the same level of benefit. L&G told me so over the phone in 2006. And my complaint isn't about the size of premium. My previous mortgage had been an "endowment mortgage" so I had never had life insurance and had no frame of reference as to what was a reasonable monthly premium.

I never thought of this policy as being mis-sold before today, but the MSE email this morning described "Plevin" cases as having "excessive commission" added on. I'm fairly certain that paying £70 for a £7 policy would be excessive. Could somebody please take my original question at face value, assume I'm not an idiot and that I am relating everything correctly, and if possible answer question 3? Who could I claim from? FSCS? How?

dunstonh

I believe that I am comparing like for like. The difference between £7 and £70 is more than 15%-25%.

Sorry but it is not possible. You are not comparing like for like. Both responders on this thread know the pricing and have told you its not possible.

We have seen people make the same claim in the past. And it usually turns out to be that the original policy has critical illness cover and the new one does not. At £7pm you would be looking at a basic term assurance policy with no addons (so no critical illness cover for example). Another common thing is that people mix up terminal illness cover and think that is critical illness cover.

A £7pm comparison site policy arranged by a bank or tied salesforce agent may have got to £14 at most on a like for like basis.

Basically being sold a policy that appears to have had £63 a month commission payments added on. I trusted the broker because he was an independent, fees-free, whole-of-market mortgage adviser, just like MSE advised to use. He got me a good mortgage, then whilst in my living room offered to sort my life cover out as well. He told me it was a good policy, I just signed some forms.

It didnt have £63 a month commision on it. As you say he was an independent rather than a tied rep, then that £7pm policy would be more like £11 with an independent.

I wouldnt call L&G a good policy. Its a good budget policy but for a few pennies more each month you can get better value for money. Our guys tend to use L&G when cost is the absolute driver and if they come out cheapest in that scenario.

I never thought of this policy as being mis-sold before today, but the MSE email this morning described "Plevin" cases as having "excessive commission" added on. I'm fairly certain that paying £70 for a £7 policy would be excessive.

I'm afraid you still havent given a missale reason. You are 100% mistaken in what the old policy covered you for compared to the new one. I would put money on the old one having Critical illness cover and the new one only having terminal illness cover.

edit: I just did a check for a quote at £7 pm as the premium driver and on nil commision basis. Then redid the quote on full commission basis and the premium went up to £9.34pm on a like for like basis. I then included Critical illness cover and the price went up to £47.20. There are a number of other options too that could be included that would push the premium up (plus I was pricing CIC on a 21 year old. An older person or joint cover would see increased costs for CIC) However, you can see that the pricing difference on a £7pm policy on maximum commission basis was just £2.34pm difference.

L&G also have multiple plan versions with different levels of cover. There were 10 versions appearing on the quote list. Each having different levels of benefit (largely getting better coverage as the price went up).