I had a mortgage with a large Building Society and with it came an insurance for Mortgage Protection. I redeemed the mortgage 5 years ago but the premium cover is still being collected from my bank account.

I have noticed that on a letter from the Society there is a paragraph that states:

(...)to be eligible for our Payment Protection cover you must be:

aged over 18 or under 85 and have a XXX Building Society mortgage

OR

aged over 18 and under 65 and have a mortgage agreeement with another Lender.

Why have they collected the premiums even after the mortgage terminated ? Was this legal ? Can I ask for a refund ?

Thank you for any advice you can give.

Nino

I would say that they are different matters. Whilst the existence of the motgage may be dependant on the insurance being in place, the insurance need not be dependant on the existence of a mortgage.

Its a case of checking the T&Cs, but I fear you may not be able to reclaim. I would however be quite happy for someone to show otherwise.

Why not try ? If anbody is willing to give me a little help for example in writing a letter I 'd take them to the small claim court.

Anybody ????

On querying , the Building Society answered by letter : "I can confirm in the event of an accident or sickness you would be able to claim on the insurnace policy".

This was in June 09.

I did not feel conformtable with that answer so I wrote back: "The cover is an MPPI so I would assume the presence of a mortgage on the property is an essential pre-requisite" and (...) "I am seeking reassurance that the sickness or accident benefit will be paid to me even in the absence of a mortgage on my house" and "please have an answer given to me by the scheme underwriters".

The answer has arrived today but not from the underwriters but by the Building Society and it reads:

(...) As you do not have a mortage you would be unable to claim under the policy. The policy is not an income protection policy, it is to cover mortgage payments only. We have referred to our specialit advisory team and they have advised us to cancel the policy back from the start of the year as a gesture of goodwill. We cannot give a refund any further back because it is YOUR RESPONSIBILITY TO ADVISE US WHEN COVER IS NO LONGER REQUIRED".

There we are then ! I am proven right but the matter is no over.

They also wrote "when you redeemed your mortgagewe do not automatically close the policy as you may have remortgage ELSEWHERE".

They have shot themselves in the foot. My Mortgage was only and ever with that BS and they are even being holding on to the house deeds since redemption. To say they what they did is a sign of great superficality !

They should refund me from the day I paid back my mortgage full stop.

I hope this topic is making interesting reading for others who may be in the same position.

Nino

make a complaint and advise them that you will take them to the FOS make an indemnity claim at the bank for all the payments you have made since your mortage was redeemned.(the bank will refund you and the MPP has to pay the bank)

Was it the same building society that provided the MPP as the mortgage? as you could also argue that when you redeemed your mortgage they should have also ceased collection of payments on the MPP as they are one of the same etc.... i see this all the time with Natwest

Thank you vusys1 for your advice.

Yes the Building Society was the same one providing me through their Insurance arm , the cover.

I was thinking of taking the matter directly to the Small County Court against the Building Society.

Instead you suggest that I file an indemnity claim against my bankers. Do you mean I should hold my bank responsible for payment of direct debits which were not technically lawful ?

But would this process not be excluding the Building Society from the equation ? Surely they are the culprit in this matter.

Also the MPPI underwriters changed a few years ago and even the premiums have been collected from banck account with two different banks over the years. It would make the calculations and process so much more complicated.

vusys1 why would I want to hold my bank responsible for the claim when it was my Building Society that made the mistake >

I do not understand , unless you forgot at that point of your sentence that it was a BS not a Bank the subject of the issue.