Repayment Insurance Business Loan

[DerekCor]

Hi All
Looking for some guidance on this matter, how to proceed, if we should proceed!
My wife and I took out a business loan with Lloyds TSB in 1999 for an amount of £59,500 to purchase a commercial property valued at around £75,000, loan secured on the property.
We originally wanted the loan over a 5 year period as we felt able to pay the high monthly costs. Business manager suggested 10 years as would keep costs down and give a little more monthly breathing space. Also there would be no penalty in repaying early if we were able to do so. Fair enough! Would say that at no time was repayment insurance discussed, or any other insurance for that matter.
So we were surprised to see on receipt of the formal loan agreement that the loan amount was £64,942 stating “this amount to be used for purchase of freehold premises and for the payment of a premium of £5442 for loan repayment insurance”
We queried this with the BM reminding him that it had been our intention to settle the debt within 5 years and that this premium was rather excessive for such a short period. He told us not to worry as we would be entitled to a pro rata refund of premium on settlement of the loan whenever that may be. We were also told basically no insurance, no loan!
To cut a long story we did in fact repay the loan at the 5 year date and received a premium refund of £1100, rather than the £2700 expected. The settlement figure for the loan included the full premium for the period which we queried and were told that we had to settle in full and that we would receive a premium refund within 10 days or so. We received the amount of £1100, 9 months after settlement date, despite continually hassling the bank for these monies!
A couple of points to mention - We never received a policy for this insurance, we never even knew the extent of the cover or even the name of the insurer or policy number!
We have been continually requesting copy of the policy, if only to just check the t&c’s, but having been promised this a number of times by the bank, still no policy.
We have at the same time been requesting the balance of premium we expected i.e £1600 based on strict pro rata, this has been declined by the bank who say not pro rata as premium costs higher at start of loan as larger amount o/s!
Having read through the various forums I am now wondering if we should not be requesting refund of premium in full as there has surely been a case of serious miss-selling here? In fact selling is wrong word, the premium was just added without discussion!
Regards
Derek

[kokomar]

Hello, under s.78 (1) Consumer Credit Act 1974 (s.77 (1) for fixed sum credit) you can ask for a true copy of your original agreement (ie the one with your signature) and any document referred to (ie a PPI policy) and they have to provide it within a set time frame laid out in the Act or the agreement in void, BUT from what I've read on this site as this was a business loan I'm pretty sure the CCA won't apply, however there must be something similar for business to business agreements and someone on here will know. Just thought I'd bump you back up to the top of the list again! Good luck. Koko

[DerekCor]

Koko

Thanks for your reply, and and I am sure you are right in that CCA does not come into this. I think perhaps a more formal letter to bank saying we will not be going away and intend to fight legally if necessary might actually make them take the matter a little more seriously, as at present they appear to be showing little if any interest!

Regards

Derek

[Keith22]

Hi,

I more or less had the same scenario but I did manage to get a copy of the application form for the loan and the insurance. I found that on the insurance form there were several tick boxes that had been completed by my BM which I had not seen - I was only ever given the last sheet to sign. I have been fighting for months to get the premiums refunded but they have refused outright saying that under the T & C's I should have cancelled within 30 days. The policy details I think might be on their web site. I have now had a final refusal to repay and I will have to take it further but it might take some time to get a legal case sorted out. I am contmplating going to the FSO not because I really expect a good verdict but its free and will cause the Bank a bit more hassle whilst I sort out the court route. It is surprising how many of these cases are coming to light but in view the heavy sales culture at the Bank it is hardly surprising.

Good luck - anything I get which is useful you can have

[DerekCor]

Hi Keith

Thanks for your information. Will be very interested to know how matters progress for you. Likewise anything useful that happens with my case, I will let you know.

Thanks again and good luck to you

Regards

Derek