Can you get the money back

bobwat

Hi everyone

I'm not sure if this should be under Insurance however it is related to a Mortgage. I am also investigating on behalf of my Sister & Brother in law who are now well into retirement.
Now they paid off their mortgage some seven years ago, which of course was covered by insurance as they were both self employed running their own business. It was of the insistance of the mortgage lender in this case Lloyds TSB that the insurance must be tacken out with them. Just recently my sister in law has discovered that the monthly insurance premium has been taken from their bank account ever since the mortgage was finished. Now she has spoken to the bank and the payment has been stopped now, but the bank have said it was their responsibility to cancel the insurance when the mortgage was payed off and that they cant have any of the money back that has been payed over the last seven years. Unfortunately my brother in law is in the early stages of dimensa and cannot remember if he was ever told that.
So, my question, is there any chance that there is a process or procedure that can be taken to try and recover all or part of the money that has been paid or have they lost it.

Thanks in advance for any advice.

Kind regards

Bob

dunstonh

So, my question, is there any chance that there is a process or procedure that can be taken to try and recover all or part of the money that has been paid or have they lost it.

Mortgage payment protection plans paid on a monthly basis are standalone plans and are the responsbility of the account holder to keep under control. There is no actual or possible link to the mortgage itself. Indeed, many are written to allow the mortgage to be redeemed but still provide income protection after that.

I cannot recall a complaint similar to this being highlighted in the FOS monthly publications, so cannot say what would happen. However, my feeling would be that the complaint would not be upheld. Individuals are responsible for their own contracts and payments going through their bank account. The choice to cancel or not is with the individual. Looking at it another way, had Lloyds cancelled it and then a claimable event took place after that, no doubt the individual would be looking to complain that the bank cancelled their income protection.

The direct debit mandate on these plans is open ended with no final date so again no comeback there either.

Also, the protection would have been sold pre-regulation so any complaint dealt with would consider the rules in place at the time and you can more or less read none in to that.

bobwat

Thanks for the quick response. I understand what you have said. Grim outcome, a lesson to be learnt I guess.