MCOL For cancelling Life Insurance Policy

[Mike_hawk]

VMT Mike_hawk I have removed the attachments as advised. I have reloaded the TOB. In my next post I will hopefully load info from the FSA with ref to rennuz comments to get another couple of views or debates going. They are in essence used to draft my letter.

 

Be grateful if you could check out this attachment is ok

 

[ATTACH=CONFIG]38135[/ATTACH]

 

Basejumper

 

The attachment is fine now.

 

Your main consideration [from my knowledge of sct] would be to put the claimant to strict proof of loss and put it to proof [on the balance of probability] that you would have been aware of the effect of same at signing of the agreement.

 

The term gives the appearance that it will set off the paid premiums against the clawback, ergo no insured period.... something can't quite be fair in such a term?

[Mike_hawk]

Basejumper

 

Can you post the full particulars of claim, it may assist anyone looking in

[Basejumper]

As requested here is the N1 as written, including the usual names and adresses and a date stamp of service.

Brief details of claim:

Outstanding sums due in respect of an agreement entered into between the Claimant and the Defendant plus interests and costs.

 

Value

£1,261.61 is made up of original debt of £997.31 plus interest to date of £12.30 plus a tracing agent fee of £42 (inclusive of VAT) to trace the debtor plus solicitors fees of £210 (inclusive of VAT) to recover the debt, plus future interest.

 

HR Act - No

 

POC

The Claimant claims from the Defendant money due and owing in the sum of £997.31

The Defendant entered into an agreement with the Claimant in respect of an insurance policy fee on 11 June 2009 ("the agreement")

A copy of the agreement (which i have put in post #23) is attached. Under the agreement there was a requirement that the Defendant would make a minimum of 48 payments to the Claimant, failing which a clawback provision would take effect. The Defendant ceased making payments in November 11 failing to satisfy the minimum payment clause. The Claimant therefore seeks to invoke the clawback provision referred to in the agreement. the clawback payable wasd £997.31

 

AND the Claimant claims:

1. The sum of £997.31;

2. Interest upon the said sum of £997.31 pursuant to Section 69 of the County Courts Act 1984 at a rate of 2.5% per annum frm 1st March to 28th August 2012 totalling £12.30;

3. A tracing agent fee of £35.00 plus VAT totalling £42.oo;

4. Claimants solicitors recovery charges of £175.00 plus VAT totalling £210.00 incurred to 28th Aug 2012;

5. Future interest upon the sum of £1,261.61 (the combined sums in 1 - 4 above) pursuant to Section 69 of the County Courts Act 1984 at a rate of 2.5% per annum from 28th August 2012 to date of judgement or earlier payment, at a daily rate of £0.07;

6. Costs

[unclebulgaria67]

This is all a bit dodgy if you ask me. You definitely need to have proof that you were made aware of the amount of commission clawback, if you failed to make the 48 payments. I believe the selling agent should have explicitly told you something along these lines. " If you fail to make a minimum of 48 payments, you should realise that you may be liable to pay me £1000 in commission clawback ". If is was said in those stark terms, then of course you would not have cancelled the life policy.

 

What is the total value of the remaining premiums to make up the 48 months ? Point 3 of the agreement limits the fee payable to the value of premiums over 48 months, less what you have paid.

 

Have they provided proof of the intrinsic clawing back the money ?

[rennuz]

This is all a bit dodgy if you ask me. You definitely need to have proof that you were made aware of the amount of commission clawback, if you failed to make the 48 payments. I believe the selling agent should have explicitly told you something along these lines. " If you fail to make a minimum of 48 payments, you should realise that you may be liable to pay me £1000 in commission clawback ". If is was said in those stark terms, then of course you would not have cancelled the life policy.

 

I am not sure why this is dodgy, the signed terms of business clearly state that 'in the event of unpaid premiums within the 48 mths of the policy inception the client undertakes to pay a fee to FA up to a maximum of the total premiums over 48 mths' Sure all legal speak is never clear but this does suggest payments have to be made up, its all there in the terms that you signed.

 

There may be some hope in the FSA statement you have posted and from an IFA's point of view this is something we are looking at as well. Like I say had similar agreements in place over last 10 yrs with previous companies and they have always been signed off by compliance and therefore the FSA. Personally never used one and if you look at previous posts of mine I have been hit by clawback a few times, its not nice but its part of the job sometimes.

 

Get them to send over the IDD, reason why letter, terms of business and factfind. This will state all fees, charges reasons for setting up plans etc. Picking at that you may find this policy was unsuitable to you and therefore any clawback is thus null and void.

[Basejumper]

Exactly unclebulgaria67. In my letter to them I mentioned this point specifically. I think a simple case of maths here. I was paying aprox £52pcm x june 09 - nov 11 = 31 months x £52 = £1612.

Then to take it up to 48 another £997.31 total payable approx £2609

 

48 months x £52 = £2496

 

Total paid plus what is claimed as outstanding = £2609.

 

The thing is it is not the agent that needs paying back. If I was not given the option to either pay upfront for the services but they would claw it back off me via the £52 my thoughts are they were gambling on the fact I was going to last 48 months. and as I did not, their gamble did not pay off so. its like backing a horse to win and it coming last or falling - do i get my money back?

[rennuz]

Just doesnt work like you say in your simple maths calculation. Firstly the commission payable on a £52 a month policy is likely to be around £1,200 to £1,400 its not just £52 *48. So therefore a lot less.

 

Then clawback is back ended so it encourages full premium payment i.e. if you stopped baying on mth 47 then its still likely to be around £200 -£300 so you may aswell make that last monthly £52 installment.

 

The calculations are all specific to each company and you could not easily work them out. That being said it would be interesting to find out what the exact commission was initially and how long was left on the clawback period but I cant see why they would be lying about these figures, although I dont know how long you paid it for, if it was for 2 yrs you will likely find the clawback is near as much as the commission in the first place anyway.

[Basejumper]

Hi rennuz, I have been on the phone to Intrinsic and the kind gentleman in the complaints dept was very helpful. it appears from what he has sais that Intrinsic do not get involved with the TOB and the fees as they are done specifically at IFA level. he also stated that he knows of cases where, in my defence, the court has ruled in favour as the terms did not mention a specific fee as in numericals.

 

So as a way forward CPR 31.14 requesting some of the articles mentioned in this thread?

[rennuz]

Good luck, just conscious in all of this that these loopholes that you have found are not cast iron and really going to court on the basis of them might prove costly and time consuming.

 

Either way good luck to you and I hope it all works out for you.

[Basejumper]

rennuz

thank you for all of your help thus far. it has been very good for, education and to be able to chat and get almost insider information to the IFA industry from someone who clearly has a passion for it.

[unclebulgaria67]

rennuz

thank you for all of your help thus far. it has been very good for, education and to be able to chat and get almost insider information to the IFA industry from someone who clearly has a passion for it.

 

Has been an education for me as well. Not to use an IFA or recommend to anyone that they should use one. Go direct to companies after doing your own research. Ask questions to make sure the product is suitable etc.

 

If the minimum period is 48 months, they should make sure this is clear at the start and put this boldly on all documents. The cancellation terms should also be made much clearer re the clawback. It just makes me think, what if someone got into financial trouble and could not afford the premiums. They would not have the money to pay for the clawback, end up with a CCJ, with bailiffs being employed. All just because they had taken out life assurance.

[Basejumper]

Unfortunately once bitten twice shy. What ever the outcome I will not lose friendships over recommendation. In reply to your post unclebulgaria67, I think that the FSA guidance may be a help especially as they made other IFAs change their TOB. The more I have read and researched it looks like a smaller variant of the PPI scandal. That is also why I believe that a Court may not enforce a persons rights to cancel their policy if a - they cant afford it for what ever reason and b - they no longer need it. surely the customer must have protection and the Unfair Terms in Contract may be the answer

[rennuz]

I think you should both be aware here that it's the terms of business that are the issue and that is all. To suggest its on a par with PPI is concerning as it would suggest you haven't quite grasped the actual claim itself. What if you had to claim for the £250k and your family got a pay out, or worse still what if you cancelled and the the pay out was zero, without knowing your circumstances would you be back on this forum asking for £250k, well maybe not you if it was a death claim.

 

Personally as an IFA we don't issue these type of terms as we go through an advice process which ensures if clients will not be able to afford something they are suitably covered, i.e. reduced premiums etc. I am going to presume some sort of life cover will still be needed as the family is still wanting to be covered for. Think of the commisson as an offset against any fee. If you don't pay a fee then the adviser gets commission, if you cancel then the adviser has to repay commission therefore work is done for free. No adviser can work like this so often these things are put in place. Like I say negotiating with an adviser will mean something more suitable will come in to play such as reduced cover etc. nobody can say they don't need life insurance, who knows what tomorrow will bring, of course if you are a single man with no dependants then perhaps but when you have a family this is when you need insurance.

 

Sure you can do things yourself, just like you can do your own accounts or own legal work but you will often find that this will ultimately cost you in ways you may never understand until you have to make a claim. do you put it in trust, do you have 2 policies in single names, do you add benefits for children, do you have the correct critical illness conditions, do you have fracture cover, decreasing term level term etc. I can guarantee in all the years I have advised on insurance, never and I mean never has anybody gone out and got it themselves, cheaper or better cover. Don't do it so much nowadays but believe me anybody who thinks they can be an IFA after doing some research on the Internet will find the IFA wins every time. We don't do degrees and get ourselves chartered status When we think the public can do this all themselves a lot cheaper, you tell me a client situation and I will show you a way an IFA can do it, cheaper, better and more tax efficient.

 

I remember reading Duncan Bannatynes book, always get a professional to do a professionals job as it will save you in the long run. Sure life cover is not really a specialist IFA subject but an IFA if they are any good will do a better deal than you will direct.

 

Sorry to rant but remember its the terms of business you are concerning yourself with and although there are plenty of people on here telling you what you want to hear there advice shows a lack of understanding and its quite concerning,they are clutching at straws that there is someway out of this, I really would be doing a deal with them directly so that you can have something in place. I have seen many of these situations in the past and remember the terms of business is there for a reason and I would ask you if you understood them because your letters show that you aren't daft.....

[Basejumper]

rennuz. I understand what you are saying, but I have to take into consideration many posters opinions and then when armed with various opinions make an educated decision which is my decision. I don't like rubbing people up the wrong way and if I have done this to you I apologise. I agree its the TOB that is the issue. If anything is achieved at Court then getting their specific TOB changed then great. If it gets judged in my favour then thats great too. I read other sites MSE for example and people say its scare tatics and go right up to the hearing stage. I am confused at this stage. Acknowledging service of claim then asking them for some additional documents to structure my defence. Not being able to go to FOS for advice as its too late etc etc. Finding out what commission was paid out versus my premiums etc. I wish for some assistance with a letter construct in the guise of a CPR 31.14 request to gather all of the evidence and as you have alluded to may be willing to assist. I believe its also too late or I'm unwilling to do a deal and sign back up. My job now comes with Life cover so I do not need another when we can ill afford extra expenditure

[Basejumper]

Sorry but what also has to be acknowledged is that the request has to be of a legal nature. As you, and others, have seen I tried a letter with a complaint running through it and questions to establish some facts before and the sols ignored it and went straight to the N1 Claims form.

[rennuz]

Dont worry you have not rubbed me up the wrong way, I can just see the path that this is going down and can forsee the outcome. Any life cover with a company is often only a death in service policy.

 

Anyway yes you should get everyones opinion and I dont want to gatecrash your post professing to know everything. Yes your defence has some bite and is worth consideration from all as clearly a deal cannot be done so thats not an option. Getting all info from the case in the first place would be my tactic at this stage, like I said in a previous post, its often easier to find a discrepancy in a case when written up.

 

Again good luck and I am sure this will sort itself out after a few headaches....

[Mike_hawk]

Basejumper

 

If your intention is to defend, this thread may assist with disclosure http://www.consumeractiongroup.co.uk/forum/showthread.php?159445-Getting-Them-To-Reveal-Their-Vitals.-Using-CPR-31.14-to-Your-Advantage

 

The undertakings referred to in a previous post [FSA] are here;

 

http://www.fsa.gov.uk/pubs/other/undertaking_beacon.pdf

 

http://www.fsa.gov.uk/pubs/other/undertaking_ap.pdf

[Basejumper]

VMT Mike_hawk. perfect. In SAx20 draft he mentions default notice, assignment notice, termination etc I am not going to have these surely in a Life Insurance policy cancellation? Would I be best advised to insert what has been mentioned in previous posts by others? The only thing the sols mention is the TOB agreement, which I have.

[Mike_hawk]

Hi Basejumper

 

Remove any reference to CCA within the template, you can request disclosure of any docs referred to in their particulars; Insurance Policy, agreement,

 

Tbh, they don't mention much..... all a little vague, a part 18 request may also assist you http://www.consumeractiongroup.co.uk/forum/showthread.php?255329-CPR-part-18-vs-CPR-31.14-Confused-well-read-here

[Basejumper]

A question which has me confused which I would like some assistance. If a company as in my case instructs a firm of solicitors to act for them to recover the debt (i.e they become debt collectors) have they (the solicitors) been assigned the rights? in addition to confirm this the firm of solicitors ask for payment of the debt to be made to them surely i have no contract with them or indeed intend to so should an offer of a % be made

[Mike_hawk]

I wouldn't think so, if the claimant is the original party to 'agreement' the sols are merely acting on instruction. If you wanted to settle you could pay to either, certainly less possibility of confusion if it was settled at the sols service address though.

[Basejumper]

Hi all, just a couple of questions, can anyone tell me if solicitors need an individual CCL or are they covered under a group licence and likewise if they employ a tracing agent does he/she need one or covered by solicitors if they are involved in debt collection or the pursuit thereof. Final one, does anyone know if I cancel my Life Insurance policy and a commission clawback provision is invoked it affects my Human Rights. I should be able to cancel this sort of policy if I want.

thank you

[honeybee13]

Hello again Basejumper.

 

In order to avoid confusion, I've merged your new thread with your existing one. I would expect people in the know to see your recent post.

 

If I've done the wrong thing, hopefully one of the experts on this thread will let me know.

 

My best, HB

[Basejumper]

Hi honeybee13, thank you for letting me know, Iwas wondering where it had gone lol. I think it sits here better as it forms part of the overall thread but I didn't know how to do it.

Hopefully I will be able to get more answers before I get my CPR 31.14 back and have to submit my defence

[Mike_hawk]

Hi all, just a couple of questions, can anyone tell me if solicitors need an individual CCL or are they covered under a group licence and likewise if they employ a tracing agent does he/she need one or covered by solicitors if they are involved in debt collection or the pursuit thereof. Final one, does anyone know if I cancel my Life Insurance policy and a commission clawback provision is invoked it affects my Human Rights. I should be able to cancel this sort of policy if I want.

thank you

 

CCL......... Law society group licence http://www.oft.gov.uk/shared_oft/business_leaflets/credit_licences/LawSocietyEnglandWales.pdf

 

Not a scooby re; Human rights