She Has To Live With Motor Neurone Disease - And Now This !!

[paws4thought]

I am writing this for my friend and neighbour. She was diagnosed with Motor Neurone Disease in September 2004 and the disease has advanced to the stage where she’s now unable to care for herself at all. Although she is physically disabled to the extent where she has to be cared for as a baby, her mental capacity and memory are very good. I became involved with the following issue last January.

In February 1996 she started using a mail order catalogue, purchasing goods very occasionally and making regular payments. She had noticed something called “super payment protection” on her statements but had never queried it. When I became aware of this I called the company (AW) on her behalf and was advised that it was for their “Peace of Mind Plan” (POMP). My neighbour was unaware of this and had never seen any terms and conditions. I now know it was Payment Protection Insurance and have read a lot about its reputation as a “protection racket.” As soon as we queried it they stopped charging the premiums. The policy is underwritten by Allianz Cornhill.

I helped my friend submit a claim, innocently assuming that Motor Neurone Disease would count as a “Critical Illness” but it was not until she received their reply that I researched the policy’s terms and conditions on their website. In summary, MND is not specified in the policy as a Critical Illness and to claim for disability or unemployment my friend would have had to prove she had been employed for more than 16 hours per week prior to diagnosis. Since she has never worked for more than 16 hpw she was therefore ineligible to claim under the policy.

To try to cut a long story a bit shorter, I wrote to the company on 11 April saying that because she had never actively ‘opted in’ to this insurance and also that since the exclusions and limitations of the policy were never explained to her she had been paying for insurance under which she was ineligible to claim benefits, stating that this is in direct contravention to the rules of the FSA. On her behalf I requested a full refund of all premiums paid plus interest that had been charged at 39.6% APR.

We received their reply last week saying that my friend signed up to the Peace of Mind Plan (!!) in May 1996. Quote “We offer the plan to our customers via an outbound telemarketing campaign 3 months after opening a home shopping account…… Therefore you will have received a phone call sometime in May 1996 where you would have been asked if you wished to sign up to the Plan. We only apply to the Peace of Mind Plan to a customer’s account where we have their explicit agreement to do so.” My friend says her standard response to telemarketing is to ask for details to be sent in writing (which she then bins on receipt). The company also pointed out in their reply that the premium was shown as a separate charge on each statement – of which there have been 130 – and would have been able to cancel at any time. Fair comment, my friend didn’t query this – but she’s not financially savvy, and trusted them!

They have turned down the request for refund of premiums saying that although she was ineligible for disability or unemployment benefit she WAS eligible for the following, and that it is not their policy to refund for protection from which she has already benefited.
· A £5k lump sum in the event of death in an accident (she has life insurance)
· Benefit in the event of being hospitalised for 14 days or more
· Death – she has standalone life insurance!
· Specified critical illness (these are defined as stroke, heart attack and cancer)
· Accidental damage, loss and theft cover for catalogue purchases for 4 years (my friend has household insurance that would have covered this)
· Access to a 24 hour helpline.

As you can imagine, my friend is very distressed by the way she has been treated while also trying to come to terms with the trauma and disability of living with MND. We would appreciate any help and hopefully legal advice that would help to get a refund of her premiums – which would easily wipe out her debt to them and more besides. My friend’s only income now is DLA.

Apologies for the long post and thanks to all of you who read this.

[Bookworm]

Ok, well... Where to start...

Please understand I am not a lawyer, these are opinions.

1st things 1st, sorry if I state the obvious, but I take it that the PPI has now been cancelled? Please make double sure of this, do not take their word for it.

2nd, I think that the balance of probability is in your friend's favour: Why would she take on a policy that wouldn't cover her? Why would she take on a policy when she already had adequate cover? Therefore, it would seem likely that she did not in fact, ask to purchase the policy.

3rd, the fact that she didn't query the premiums charged to her account. There was in fact a legal case, (Tai Hing Cotton Mill Ltd -v- Liu Chong Hing Bank Ltd [1986] AC 80) which established that "A client is not under a duty to check statements received from a bank." Although your friend's case is to do with a catalogue company, I would think that the same principle would apply. Therefore, they can't rely on this to say: "well, it's your fault, you should have checked".

4th, surely, she should have been made to sign a declaration? You know, the whole "I declare all the info is true, and if it's not, any claim will be invalid, we won't pay" kind of thing? Can an insurance policy be valid if not actually signed for?