DD's taken for insurances no longer wanted!!

lozzer1701

hello, hopefully someone can help me!!
a couple of years ago, my partner and i re-mortgaged our house. our previous mortgage provider was legal & general/northern rock, and we also had the insurances we needed on the debt with l & g (critical illness, redundancy). when we re-mortgaged it was for an amount that was 2-3 times that of the original debt and with a different provider- so the original insurances were cancelled as they wouldn't have given the cover that we now needed, and new polices taken out elsewhere that did. here's the sticky bit....as we now had plenty of money in the joint account, i left it's care in the hands of my partner-simply because i didn't expect there to be any problems with it. i put my hands up to the fact that i didn't look too closely at it myself as i wasn't expecting any problems in its management, what with the threat of overdraft being non-existent. but it came to the bank charges reclaim we made (we did have problems before the re-mortgage!!!)...during the process of going through all the statements, for the period after the re-mortgage, i found that l&g were still taking money for the insurances that were cancelled. thankfully, they weren't taking the mortgage payment as well!! having realised how completely useless (!!!:eek:!!!!) my partner has been about doing anything about this (i would have thought he'd have picked this up, well before i did!!!), i've now started seeing what we can do about this (if you want a job doing properly, do it yourself, etc...:p). i would have thought our bank would have helped through the DD guarantee scheme, but they say that they'll only do something if it was them that made the mistake. l&g are trying to make out that the insurances are covering our new debt and it isn't in their policy to refund insurance premiums. but they were cancelled-after all, why would we keep up an insurance that didn't give us the protection we needed??? unfortunately after this time i cannot prove that the insurances were cancelled, all i know is that they were. what can we do? all the bank would do was cancel the DD's at their end-but it does worry me about what else L&G are going to do as their own blurb tells us not to cancel DD's with the bank, but that they will deal with it. in this case, for whatever reason, this hasn't happened. i just needed to be sure their mistake wouldn't cost us any more money than it already has, as it seems they cannot be trusted to sort things out themselves. does anyone here have any ideas on how i now proceed? can i easily get our money back? oubviously after all this time, it will add up to quite a bit. sorry if this has gone on a bit, hopefully we don't look too daft and that someone can help!

Mikeyorks

lozzer1701 wrote: »

as their own blurb tells us not to cancel DD's with the bank, but that they will deal with it.

..... that's not unusual with Insurances. If you abort the DD then you're effectively voiding the Insurances as you're no longer paying the premiums?

However your problem is the converse. You are paying the premiums, but allegedly don't have the Insurance? You can't claim on the DD Guarantee as you are unable to prove, reasonably, that 'an error' (the criteria) has been made.

So you can only negotiate with L&G to the effect the Insurances were cancelled in parallel with the Mtge being moved. Potentially difficult if you have no direct proof and the Insurances were freestanding (L&G) and not directly consequential to the Mtge (Northern Rock)? It may be easier if the Insurances were organised as part of the Mtge process ... as at least you have the tie-in aspect to argue?

lozzer1701

we do have information that infers that these insurances were taken out for the original debt, and were instated at the same time. the daft thing as well is that when we spoke to L&G about this, they asked us to prove that we had taken out another mortgage (!!!!) and that we had other insurance.
what we can also show is that the critical illness/life cover covered us for exactly the amount of the original mortgage. useful...?
i don't know why i'm not surprised that this has happened...when we were sorting out the new mortgage in the first place, L&G claimed our deeds had been requested by another solicitor (who had nothing to do with us whatsoever), and sent them out before ours asked for them. by the time they were traced and had finally been returned (after being lost in the system), our first offer had expired. when we finally did get our mortgage sorted a second time, they did the same thing again, only this time the copy of the prc certificate that was held with the deeds went missing completely. they claimed phone calls on the matter weren't made when they damn well were, and other correspondence wasn't made which was and vice versa. that's how i know that the DD's were cancelled as much as anything....after all the mistakes and heartache they'd caused, we wanted nothing at all to do with the organisation!!!! i've got a horrible feeling that they've rolled us over again....:(

JohalaReewi

lozzer1701 wrote: »

... so the original insurances were cancelled as they wouldn't have given the cover that we now needed, and new polices taken out elsewhere that did...

Did you actually cancel the insurance or did you assume that the insurance had been cancelled. If you actually cancelled, you should have some correspondance which can confirm this. If you assumed that they would be cancelled, then they probably weren't.

...i would have thought our bank would have helped through the DD guarantee scheme, but they say that they'll only do something if it was them that made the mistake...

The DD guarantee scheme covers you against mistakes made by either the bank or the company taking the money. Basically, you should be notified in advance (at least 10 days) of when a direct debit will be taken and how much will be taken. If the DD is taken too soon, or too much is taken, you are covered by the scheme and your bank has to give you a full and immediate refund even if it wasn't their fault. In your case, the guarantee would only apply if you had cancelled the DD yourself but payments were still taken, or the insurance company told you they would not be taking any more but continued to, or that the amount taken by the insurance company increased but they didn't tell you about it.

... unfortunately after this time i cannot prove that the insurances were cancelled, all i know is that they were... does anyone here have any ideas on how i now proceed?

Perhaps you could claim a refund via Martin's 'reclaim your PPI payments' scheme?
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance

lozzer1701

...hadn't even thought that the insurances could have been mis-sold in the first place! am currently trawling through the appropriate thread, having read through martin's article. hand on heart, i can honestly say that we were lead to believe that we HAD to take out l&g's insurance(s) on the mortgage. the possibility that we could get insurances from elsewhere to cover the loan definitely wasn't mentioned. i had no idea that we could possibly reclaim on this basis, until you mentioned it..though the in's and out's of this matter are probably best discussed in the ppi thread. thanks for mentioning it, wouldn't have known otherwise!!!;)

dunstonh

...hadn't even thought that the insurances could have been mis-sold in the first place!

They dont sound as if they have been. They are the typical ones you have with a mortgage so unless you can prove you didnt have a financial need for that at point of sale then they wont be mis-sales.

i can honestly say that we were lead to believe that we HAD to take out l&g's insurance(s) on the mortgage.

L& G insurance agents usually charge a fee for a mortgage unless you take out insurance.

the possibility that we could get insurances from elsewhere to cover the loan definitely wasn't mentioned.

Tied reps dont need to. That would be like Tesco telling you to shop at Asda.

i had no idea that we could possibly reclaim on this basis

You cant.

Retired_I.F.A.

But you can complain the original polices need not have been cancelled as top up ones were all that was needed if they could not be altered.

The practice is know as "churning" replacing a policy with a far bigger one pays a lot more commision than the top up that's required.

The fact the original is still in force could merely be down to your own error ie; phoning the bank and saying stop the diirect debit needs written confirmation too, that you may simply have forgot to write.

lozzer1701

i do seem to remember that the advisor we saw wasn't strictly an l&g rep, he was a financial advisor who worked in the estate agents that we got the property through. we were under the impression at the time that he had at least some degree of independence- i've emailed the estate agents to check this (their website at least now suggests that they "search through over 4000 products from 150 lenders",etc, etc..i've also looked through the information we still have from the time, and the financial review we have only 'recommends' the critical illness cover. there's a box ticked saying that we would like a QUOTE for the other cover, but there is none of the associated boxes filled in, and nothing else to say that the product we seem to have ended up with was appropriate. as an example, i was off work ill a couple of years ago for 3 months. however, i never claimed on any of my ppi's as the company i work for pays full wages.
as for the cancellation- (and this is a direct quote from them)
"if you have any problems with payments, decide you no longer require a particular product or change your bank details, you should get in touch with your financial advisor or call us direct at the earliest opportunity" (i know this was done over the phone) "please do not cancel the direct debit instruction yourself. we will make all the necessary arrangements direct with your bankers."(they haven't, for whatever reason). in hindsight, we should have kept hold of more of the later correspondence with l&g than we did. what we now seem to need would probably be to hand now (the only reason we can find the early stuff was it was kept in a different place!):(

dunstonh

i do seem to remember that the advisor we saw wasn't strictly an l&g rep, he was a financial advisor who worked in the estate agents that we got the property through.

Quite a lot of L&G reps do.

we were under the impression at the time that he had at least some degree of independence

Dont tell me, did they use mortgages as an example? That is a common one with tied reps. The mortgages can be from a panel or whole of market but they are still tied for insurances.

Take a look on http://www.fsa.gov.uk/register/home.do and see if the company is linked to L&G on when you click on the principles button. If it does, then you can also complain that they misrespresented their adviser status by telling you they were independent.