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Unfair Interest Charges by the NORWICH UNION


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hi

I am not sure if if I have a case or not or if this is the right place for this post if not then I do apoligise and ask that someone please guide me as to who I should contact or what is the best way to deal with this if any ?. thanks

 

I have an endowment policy with the NORWICH UNION) which I took out in 1982 & matures Nov 2007 the premium is for £18.60 a month and has a 25

yr term to cover my mortgage. In the late 80,s early 90,s I was made redundant and found it difficult to get work and pay my bills, I got into financial difficulties one of which was I missed SEVERAL payments on my NU endowment policy. I in turn contacte dthem & told them the situation & asked them what was the best thing forme to do? I was advised by one of there staff that this was not a problem that the policy had a built infacility to deal with things like my situation & not to worry ? . I was married with 4 kids & never gave it a second thought as I thought everything was ok & part of the policy , only to my horror when I had a visit from a IFA who said that what in fact had happened was that all they had done was take out a loan to pay my for my missed endowment premiums and I was being charged interest on this until it wa paid back in full , this was never explained to me by NU , I contacted NU aon a number of occasion asking them to explain why they had done this & how I can stop the interet from increasing out of control , all they told me was yes as long as I could make regular payments of between £500 & £1000 each month till it was paid back then this would be the only way, as a young man with a family & on a low income this was impossible form to do.I asked them if they could freeze the interest but they refused , the only solution was to either make these large payments or pay back the full amout . I feel that for such a small amount I owed they have made unfair interst charges & I think what started out a smallish loan has now turned out to be a major one .

COMPLAINT I HAVE IS THE AMOUNT OF INTEREST THAT HAS ACCRUED AND STILL IS ON MY POLICY COMPARED TO THE AMOUNT I OWED IN MISSED PREMIUMS also THE LACK

OF ADVICE I WAS GIVEN there was apprx £2000 ? in missed premiums and the interest I have been charged on top of the £2000 is apprx £6000 in INTEREST, TOTALLING £8000 with another £660 still to be added this year I have contacted Norwich Union on a number of occasions asking if they could look at my case as I would like to stop the amount of interest accumulating and make regular payments so I can payback what I owe them, BUT THEY WILL ONLY ACCEPT LUMP SUM PAYMENTS

of £500 or £1000 ,WHICH I CANT AFFORD. AS I CANNOT PAY BACK THE LUMP SUMS ASKED FOR, IT APPEARES TO ME THAT THE COMPANY HAS TRIED TO MAKE THINGS AS DIFFICULT FOR THE CUSTOMER

AS POSSIBLE FOR THERE OWN GAIN. I am being charged interest on top off interest which I find VERY UNFARE!!!!!!!!!!!! WHEN I SPOKE WITH THE NORWICH UNION AND EXPLAINED TO THEM I WAS FINDING IT HARD TO KEEP UP PAYMENTS IN THE 80s & 90s,I WAS TOLD NOT TO WORRY THAT IT WOULD WORK ITS SELF OUT WHEN MY MORTGAGE

WAS PAID OFF AND MY POLICY MATURED AND JUST MAKE WHATEVER PAYMENTS I COULD.

I was never given any advice on MISSED PAYMENTS what the interest would be or the amount I would be charged or for how long , IF I HAD KNOWN THE CONDITIONS AT THE TIME I TOOK OUT THE POLICY OR THE AMOUNT OF INTEREST THAT WOULD BE ADDED DUE TO MISSED PREMIUMS AND HAD BEEN EXPLAINED TO ME WHAT THE OUTCOME WOULD BE, I WOULD NEVER HAD LET THIS HAPPEN OR TAKEN THE POLICY IN

THE FIRST PLACE, I feel the company has acted irresponsible and not given the best advice to its customer . I think something should be done about this and I am prepared to take this as far as i can. I think they have EARNED MORE THAN ENOUGH INTEREST OF ME FOR THE MISSED PREMIUMS .

------------------------------------

COMPANY DETAILS

Trader's Name.......NORWICH UNION

POLICY NO. xxxxxxxxx OR (PLAN NUMBER : xxxxxxxxxx)

Trader's Address..colegate business park

PO box 520

Trader's Phone No...08459 444111

 

YOUR SINCERELY

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I'm not at all familiar with endowment policies etc, but surely you would have had to sign a credit agreement to take out a loan. As far as I'm aware this a legal requirment and there are very strict guilines governing it. I assume you didn't sign any such agreement as you weren't aware of the loan?

Mindzai & Lucid vs Lloyds TSB

 

Mindzai's Account - Partial settlement offer rejected

Joint Account - Partial settlement offer rejected

_________________________

Spreadsheet for compound contractual interest and statutory (s69) interest:

Download v1.9 [Tested with Excel 97-2007 and OpenOffice 2]

PLEASE NOTE: You should fully research contractual interest before you use that functionality of this spreadsheet. If in any doubt please use it to calculate 8% interest under s69 County Courts Act 1984.

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Not that I am aware of ,If my memory is correct Im sure what they said was that at the time I signed for the endowment there must have been some sort of the agreement that states that if a customer falls behind or misses premiums then they have a right to take out a loan to cover the policy & keep it active this is part of my policy which I must have agreed to not knowing and was never made aware of this part of the policy ,maybe it was in the small print ?

If this is the case then surely there still must be something can be done about the amount of interest that has accrued & also the conditions they put on me to pay the money back which was inpossible even for the working class man.

Thanks

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Have you taken a loan from your endowment fund ?

 

If so then this + interest would be taken from the final fund value of surrender or earlier repayment by you.

 

You were only allowed to take out certain % of your fund.

 

You may be able to go back and claim bad advice if you were not made aware of any potential shortfalls or risks.

4th January 2008 - Prelim sent

16th January 2008 - Standard reply - NO!

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Hi thanks for replying, the answer to your question is no I never took out a loan from my EF, the only thing I know is that NU said that my policy covered me for things like if I could not make payments there was a condition in my policy that the payments would be met ? I think this might be the case that they in turn made these payments on my behalf i.e maybe they NU took out a loan to cover my missed premiums )therefore I would have to pay them back whenever I could or when the policy matures ? but my complaint is not that I dont want to pay what I owe them, its the way in which they went about it not explaining what was being done, & also the amount which they asked ME TO PAY THEM BACK per lump sum ( between £500 to a £1000 ) at a time which I found impossible , also the amount of interest on the original amount of ( missed premiums apprx £2000 in premiums & almost £7000 in interest has now accrued ) I will owe them something like £8000 in interest + the £2000 in missed premiums they made it very hard for me to pay back with such large lump sums to pay them back at a time, surely the amount of interest that they have charged me is very unfair considering the condtions they put on me , is there anything can be done to stop this or even pay them back a reasonable amount, after all they told me originally when I took out the policy there would be a guaranteed amount of £17000 when my policy matures , obviously they deny that they said this, but they did plus the mortggae would be paid for in full. When ever I wrote to them about this thwey say there is now nothing that can be done as they have made there decision & its final.????? where do I go from here, p-lease help

Thanks

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You need to send them an S.A.R - (Subject Access Request) includinga £10 fee. among the things you

should ask for is the original agreement stipulating the conditions of the loan

they invoked. And you want statements on the loan as it has accumulated

over the years.

 

Another thing you should do is ring and ask them for a settlement figure

now for your policy. That will tell you how much the policy is worth now,

so you can see what the difference is between your mortgage and the

policy. if there is a fair amount over the mortgage, you can take a certain

amount out of it to repay/reduce the loan notwithstanding the fact that

the mortgage lender has a lien on your policy.

 

PS On the other hand, had they not made those payments for the past 17 years, next November you would be looking at an even bigger bill

to pay off your mortgage.

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When Endowments were sold you had to establish the clients attitude to risk. I used to work for a life sompany who was terrified of full invetsigations as the factfinds that were completed back then did not really take this into account or was glossed over.

 

You can never guarantee ORDINARY endowment maturities (funs can rise and fall) It goes back to old days "you will pay your mortgage off and have some over !!!" a guaranteed endowment would very expensive.

 

If you were MISSOLD and endowment then this would be very serious.

 

Sometimes there is a waiver of premium option which ensures the premiums would be paid for by NU following SICKNESS. I dont recall ever seeing one with REDUNDANCY cover attached.

 

It sounds to me as the monies used to pay your out standing premiums have been LOANED by NU to pay for from your maturity value + interest.

 

SAR would be good although if you request your :

 

1) Key Features document.

2) Copy of any credit agreement or where you signed to agree to this loan.

3) The orignal policy documents.

4) Your signed declaration for the original endowment.

 

Please remember.

 

Look at current climate for endowment mis selling.

 

Life co's are very worried about incorrect advice and there is very definate recourse to companies who fail.

 

As a customer what do you know about endowments. You trust a company to give sound ADVICE.

 

If they ADVISED and it was detrimental to the customer then there is problem.

 

I do not know whether you would get anywhere claiming the interest.

4th January 2008 - Prelim sent

16th January 2008 - Standard reply - NO!

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