Halifax mortgage repayment insurance claim

[jowalshy]

I recently put in a claim against Halifax for MRI.

 

A the time of taking out the mortgage back in 1996, I was a housewife and my husband was self employed.

 

I received a response last week telling me that the policy was not mis-sold and as such they would not uphold my complaint.

 

My mother had recently managed to successfully claim back the MRI from Lloyds for my brother last year and she told me that she received the same response from Lloyds at first.

 

She sent me a copy of the letter and I was surprised that it was more or less word for word the same one I received from Halifax.

 

I have now sent a response to their rejection letter in the hope that I too will be successfull.

 

My response is below:-

 

Further to your letter dated 22nd January 2013 I would like to refer you to the following details that have not been addressed:-

 

1. The insurance was called Mortgage Repayment Insurance and although prior to 2005, the sale of your insurance was not regulated by the FSA, Halifax was a member of the ABI.

Therefore, as a bank, you had a duty of care to sell insurance relevant to the policy holders needs and claim capability.

 

2. You may well set down rules that must be complied with by your staff in relation to the selling of any insurance policy but obviously errors do occur.

 

3. I consider this is a case of the person who arranged this loan was not fully trained to be aware of the ‘Self-Employed’ situation.

 

4. We were ill advised to take out the policy as it would have been impossible to make a claim should there be lack of work for my husband, as he was self employed,

and I was not employed at the time. We were also not aware that the policy was an optional thing and assumed that it was a requirement in order to get the mortgage.

 

5. You state in your letter that the evidence detailing my husband’s status at the time of sale confirms that at the time of the sale he was eligible for the policy we bought.

I now realise that it would not have been possible to pursue a claim if my husband was out of work.

 

A self employed person cannot state that he is unemployed just because he has not got any work at the current time.

 

You also state that the policy documentation fully explained the benefits and limitations of the policy.

 

I would therefore be grateful of you could provide me with a copy of the policy booklet relevant to 1997

and also highlight the insurance cover part offered to Self Employed people.

[citizenB]

That should do the trick

[jowalshy]

Had a reply today. It was a 'Thank you for your recent request for access to the personal information held about your account' letter. It included a printout of the mortgage repayment insurance booklet. No date on it so I don't know whether it was for the year I requested. In the booklet it states that my husband was covered if he was self employed. Below is some extracts from the booklet printout:-

 

Self employed means you are:-

 

A) assisting with, managing or carrying on a business in the UK, and are liable to pay tax under schedule D or

B) a partner in a partnership or

C) a person who exercises control over a company or

D) working for a company and in any way connected with a person who has control over that company.

 

It then goes on to say:-

 

You have cover if all of the following apply to you:-

*. You have a mortgage with the society

* you have completed an application form which we or the society have accepted

*. You are working

*. You do not know of or could not reasonably be expected to know of any unemployment that is likely to happen to you

 

Surely, when you are self-employed it is reasonable to expect periods of unemployment?

 

In point 4.5 it states:-

 

If you are self employed we will pay unemployment benefit if:-

* you have stopped trading and your business is being wound up or put into the hands of a liquidator

*. Your partnership has been dissolved and

*. Your unemployment starts after a continuous period of 12 months during which you have been self-employed.

 

Yep, my husband was continuously self employed but unfortunately he was not working continuously for a 12 month period.

 

They would not pay unemployment benefit if:-

* you have not been working continuously with one or more employer for a period of 12 months before the date of your first claim for unemployment benefit

* at the start date you knew you were going to be made unemployed or you had reason to believe that it was likely to happen.

* your work is seasonal and unemployment is a normal part of it or unemployment is a regular feature of your work.

* unemployment is the result of:

A) the end of a fixed term contract or contracts which had not been in force with the same employer for at least three years.

 

 

It also goes to tell you how you can make a claim

 

For unemployment claim you must arrange for your previous employer and a department of employment official to fill in the relevant sections of the form.

 

 

My husband is a self employed electrician who works on small contracts with various contractors. Surely he would not have been covered by the insurance policy.

 

Any help would be much appreciated. If need be I can scan the whole policy and add it here.

 

Thanks

 

J

[citizenB]

It doesnt look to me as though he would have been. However I will send out an S.O.S for you.

 

 

What about if he was just off sick for some reason ?

[ims21]

Hi

 

Responding to CB's SOS.

 

You are being given the runaround.

 

The only way a self employed person is unemployed is if their business ceases. PPI does not cover a self employed person for periods when there is no work available.

 

This is one of the major reasons why PPI is useless to the self employed.

 

The fact that they gave you a booklet and possible gave you the right to cancel is not a good enough reason for not upholding your mis-selling claim either.

 

Their assumption that their training methods ensured that PPI could not be mis-sold is also rubbish. The person who has given you this decision was not there at the time so it is pure speculation.

 

In short, you are right, he would not have been covered by this policy.

 

You might like to give fos a call to see if they can take this case on for you. If not then your other option will be to sue them through the courts although the onus of proof of mis-selling will be on you as the claimant.

[jowalshy]

Thanks for the SOS callout CB

 

Thanks for your reply ims21. I have decided to have one last bash at requesting a repayment of the insurance before I make the decision of whether to go to the FOS for help or making a claim through the courts. I have written up the letter below, and any advice would be gratefully appreciated.

 

Dear Mr Halifax,

 

Mortgage Number:- XXXXXXXXX

Your reference: XXXXXXXXXXXX

With reference to your letter dated 8th February 2013, and the accompanying documentation, I would advise you that I disagree with your findings for the following reasons:-

 

1. The policy documentation you provided was not dated and therefore I have no physical evidence of that being the actual policy that was applicable at the time of the Mortgage Repayment Insurance being charged. You have only provided a printout and had you provided the actual booklet, it would have been dated.

2. If this was the actual policy document I received, I was not advised correctly of the conditions set for self employed people. Had I been advised correctly I would have realised that the conditions could not apply to us at all for the following reasons:-

a) It states that we would be covered if we did not know of or could not reasonably be expected to know of any unemployment that is likely to happen to us – My husband was self employed and it could be reasonably ascertained that he would be unemployed, e.g period between a contract ending and a new one starting, for periods throughout the term of the policy.

b) It states that if my husband was self employed you would pay unemployment benefit if the unemployment starts after a continuous period of 12 months during which he had been self employed – When you are self employed, you do not start and stop being self employed between contracts. Therefore he was continuously self employed, even if he was out of work for any periods of the policy term. This is good news, but unfortunately the policy then carries on to state where we would not be covered.

c) We were not covered for unemployment benefit and you would not pay unemployment benefit if my husband had not been working continuously with one or more employer for a period of 12 months before the date of the first claim for unemployment benefit. – This contradicts point 2 above. To me this reads as though my husband would not be covered as he was self employed and does not work continuously for a 12 month period. Sometimes there were breaks in contract work. Sometimes these breaks could be as little as a couple of weeks and other times could stretch to more than a month.

d) We would also not be covered if at the start date we knew my husband was going to be made unemployed or we had reason to believe that unemployment was likely to happen. It could be safe to say that the length of the contracts my husband worked on were in the region between 3 months and up to six months long. Therefore he knew he would be unemployed at the end of the contract but could not possibly know when a new one would commence.

e) The policy also states that we would not be covered if the work was seasonal and unemployment is a normal part of it or unemployment was a regular feature of the work. That is one of the unfortunate features of a self employed sub contractor. Unemployment is a normal part and is also a regular feature.

f) If unemployment is the result of the end of a fixed term contract or contracts which had not been in force with the same employer for at least three years you would not pay unemployment benefit. – Being self employed as a sub contractor in the construction industry it is very rare to work for the same contractor for at least three years. Should this happen, it would probably be deemed as employment t rather than self employment. In my husband’s case, he worked for a variety of contractors.

 

In conclusion, I believe that we were mis-sold the Mortgage Repayment Insurance, as it was not explained fully enough to us, at the time, about the limitations of the policy for self employed people. Had we been made aware of such limitations within the policy, we would certainly not have taken it out. We trusted the advice given by your representative, who was obviously not completely knowledgeable about the rules of self employment, as it is clear that we would not have been covered by the policy let alone be able to make a claim on it.

 

I am now asking you to reconsider our claim for the mis selling of the policy and refund us accordingly.

 

Yours sincerely

[citizenB]

Looks pretty good to me jowalshy.

 

They appear to have a policy of rejecting everyone on first attempt without bothering to investigate. Only when a claimant then responds as you have, do they deal with the claim in the correct manner.

 

I would also think that a lot of people would not persist which is obviously in their favour.

 

Look forward to the next instalment

[jowalshy]

Thanks cb. I'll keep you posted