MCOL For cancelling Life Insurance Policy

[Basejumper]

Morning All.

 

A bit of a strange one this and I can not find any direction so turned to you for help. Due to my work in 2009 I took out additional Life Insurance FP Level Life.

 

However, in November 2011, as my job role changed it was no longer required and as my wife was made redundant, the money would be best utilised in the family pot. As time marched on I thought no more, foolish.

 

I have recently been contacted by a firm of solicitors acting for the company I had the agreement with claiming their 'Commission Clawback'

 

I wrote back asking for some additional information to save money e.g whether there was a fee agreement, as one is not mentioned in any paperwork I have, because I have read commission is sometimes offset against this and only the commission to the value of this fee may be requested therefore maybe only liable for the difference.

 

I also believe on reading the FSA Website on Unfair Terms in Consumer Contracts the Terms of Business (TOB) agreement I signed may be unfair and in particular reasons for believing this when you use an IFA you should have a choice how you want to pay for the services - I was not given this, and the terms do not state clearly when and how much me, the customer has to pay the IFA so therefore not aware of the full cost of the financial advice.

 

In addition I believe that my TOB agreement allowed the firm to reclaim an amount from me, the customer, if I stopped paying premiums and the IFA had to refund commission to the product provider as appears in this case. my interpretation of the FSA guidelines also leads my to think that this charge is a disproportionately large sum as I have not fulfilled part of my obligations under the contract.

 

Surely a court would not enforce this over and above my rights to cancel this policy. I have also asked these Sols for my cancellation rights to which after a period of 1 month got nothing except a MCOL from Northampton.

 

I also sent them a S10 DPA request as other members from the IFA had tried to contact me via text and email touting for business. In total the sum claimed is £1261 + Court fee made up of original debt £997.31 plus interest, a tracing agents fee because I moved and not told them £42 plus Sol fees £210 plus future interest.

 

So, apart from acknowledging service can I assume this falls under CCA rules or send a CPR 31.14 request.

 

Any help greatly appreciated.

Edited September 9, 2012 by honeybee13
Editing in some spacing for ease of reading.

[unclebulgaria67]

You certainly need the information from the claimants, so you need to send a 31.14 letter for any forms they mention and a part 18 to ask any questions you want to put.

 

When you signed up to the life assurance, they should have made clear to you, what their fees/commission were for placing the business and if there was a minimum term for the policy they were arranging. They should have asked for your permission to proceed on the basis you understood all of this.

 

This is not my area of knowledge. On Money Saving Expert sites Insurance forum, there are some Independent Financial Advisors who will be able to tell you all of the rules that apply to these arrangements and will point you in the right direction.

[honeybee13]

Hello there.

 

I'll leave your thread here for now, but you may find at some point it moves to the legal forum. I'll also flag this for the site team in case anyone has input for you. As it's the weekend, you may need to bear with us a little longer than usual.

 

I have a question please. Do you have a copy of the TOB that you signed please and the paperwork you should have recieved when the policy was set up?

 

My best, HB

[Basejumper]

Hello honeybee13, sorry for the delay been scanning MSE as suggested by unclebulgaria67. I appreciate you all have weekend commitments so no worries on that. I do have the TOB it was attached to the claim form, but i do not have anything else, that is why I asked them for it in my initial reply to their letter.

[honeybee13]

Hello again. Thank you for that.

 

Can you tell us what the TOB says about their remuneration please?

 

So am I right in thinking that you don't have the paperwork from 2009 like the insurance company illustration [this showed commission payable last time I saw one a while back] and a letter from the IFA recommending why the policy was suitable for you?

 

HB

[rennuz]

Morning All.

 

A bit of a strange one this and I can not find any direction so turned to you for help. Due to my work in 2009 I took out additional Life Insurance FP Level Life.

 

However, in November 2011, as my job role changed it was no longer required and as my wife was made redundant, the money would be best utilised in the family pot. As time marched on I thought no more, foolish.

 

I have recently been contacted by a firm of solicitors acting for the company I had the agreement with claiming their 'Commission Clawback'

 

I wrote back asking for some additional information to save money e.g whether there was a fee agreement, as one is not mentioned in any paperwork I have, because I have read commission is sometimes offset against this and only the commission to the value of this fee may be requested therefore maybe only liable for the difference.

 

I also believe on reading the FSA Website on Unfair Terms in Consumer Contracts the Terms of Business (TOB) agreement I signed may be unfair and in particular reasons for believing this when you use an IFA you should have a choice how you want to pay for the services - I was not given this, and the terms do not state clearly when and how much me, the customer has to pay the IFA so therefore not aware of the full cost of the financial advice.

 

In addition I believe that my TOB agreement allowed the firm to reclaim an amount from me, the customer, if I stopped paying premiums and the IFA had to refund commission to the product provider as appears in this case. my interpretation of the FSA guidelines also leads my to think that this charge is a disproportionately large sum as I have not fulfilled part of my obligations under the contract.

 

Surely a court would not enforce this over and above my rights to cancel this policy. I have also asked these Sols for my cancellation rights to which after a period of 1 month got nothing except a MCOL from Northampton.

 

I also sent them a S10 DPA request as other members from the IFA had tried to contact me via text and email touting for business. In total the sum claimed is £1261 + Court fee made up of original debt £997.31 plus interest, a tracing agents fee because I moved and not told them £42 plus Sol fees £210 plus future interest.

 

So, apart from acknowledging service can I assume this falls under CCA rules or send a CPR 31.14 request.

 

Any help greatly appreciated.

 

Having worked in this industry I hope I can shed a bit of light, you will find that often a life insurance commission is paid upfront and repaid over upto 4 yrs, this means often if a client cancels a policy in this time then commission is clawed back. Yes it's often disproportionate to the actual premium as the life insurance company wants to ensure premiums stay on the books.

 

As this can be a nightmare for advisers who set up life policies then they put in terms of business to ensure this does not happen or at least if it does then the client understands they will have to pay clawback back to the adviser.

 

Essentially if it's anything like an agreement previous firms I have worked for have, then it's usually water tight and it's there for this specific reason. Yes you can complain and this will cause a fair bit of hassle for the IFA but ultimately unless you can get out of it with some form of legal loophole then it's likely to be binding.

 

I would suggest you go back to the company and either try and re-instate the policy or set up a new one explaining the whole situation. Not a great conclusion I know but looking at it from the IFAs point of view they have had this money clawed back. Do remember this is scare tactics initially so try and negotiate first off as any legal action is hard work and they know it is likely to lead to a complaint from you, I.e you might want to claim all previous premiums paid from them.

 

There could well be a case for unfair amounts etc due to the amounts premiums you have paid and whether this was all explained to you but this industry is very keen on making sure all of these things are always explained in writing and this should be in any reason why letter which they should be able to provide.

 

Good luck

[honeybee13]

Hello rennuz and thank you for the up to date information. It still works the way I thought it did.

 

My best, HB

[Basejumper]

Mmmmm. Interesting.... I will see if I can attach the TOB and then to put the info out there you may well advise to reinstate if not too late, but as they have instructed solicitors and I have received a Claim form (scare tatic?) I am assuming that it beyond resurrection. Anyway I do not wish to do business with people like this.

TOB Removed due info being seen through Marker

Edited September 9, 2012 by Basejumper

[honeybee13]

Hello again.

 

I'm afraid jpegs don't work here, it becomes too blurred to read if you enlarge it. Would you be able to resave it as a pdf file please?

 

HB

[Basejumper]

HB, Easier said than done, i will keep trying I haven't got the converter on my computer so having to download one

[unclebulgaria67]

I believe that when these companies register with the FSA, they agree how they will operate in regard to commission/fees. You may be able to phone the FSA consumer helpline and they may help with a general enquiry about the way business should be conducted. They won't deal with a complaint, but will point you in the direction of the FOS. The FOS can't help, as there is an ongoing court claim.

 

Another issue here, is that I thought as part of their registration with the FSA/FOS, they had to allow the consumer the opportunity to go through a proper complaints process, with referral to the FOS. I didn't think that they were allowed to just issue a court claim. I realise you have moved, so perhaps ask for evidence that they had tried to contact you, before they went down the court route.

[Basejumper]

The thing is they did try to contact me, but at a previous address. When I got the sols letter I sent a reply, as attached, so I was seeking an amicable solution and some additional information, so I could make an informed decision on what I wanted to do. I got nothing in return except the Northampton CC claim. i welcome any comments on the way forward please. no joy with the upload of the pdf yet so I will keep trying

 

 

LETTER TO.doc

[unclebulgaria67]

Suggest sending the CPR letters to get them to disclose the basis of their claim.

 

Sounds like you are more than capable of defending this. If they did not inform you of the commission and consequenes of cancelling the assurance policy early, I think they are on a very sticky wicket.

[Basejumper]

Thanks for the vote of confidence unclebulgaria67, however, the POC only mention the 'agreement' which I have and of course the total amount of money claimed, the clawback provision and the legal costs plus agent finding fee. a CPR 31.14 will not do this I believe. I need T&Cs expressing my cancellation rights and whether there is a sliding scale. my letter refers to as much. but that didn't work. I will need an official procedure rule

[dacouc]

IS this a Zurich Policy / Agent?

[Basejumper]

No it isn't. The policy is with Friends Provident but the Agent is a small Co in Wiltshire, who I believe have not informed their main parent Co but gone ferrel

[unclebulgaria67]

Thanks for the vote of confidence unclebulgaria67, however, the POC only mention the 'agreement' which I have and of course the total amount of money claimed, the clawback provision and the legal costs plus agent finding fee. a CPR 31.14 will not do this I believe. I need T&Cs expressing my cancellation rights and whether there is a sliding scale. my letter refers to as much. but that didn't work. I will need an official procedure rule

 

Perhaps it is better for this thread to be moved to legal ?

 

Part 18 request can probe the POC.

[ims21]

Thread moved to Legal Issues

[unclebulgaria67]

No it isn't. The policy is with Friends Provident but the Agent is a small Co in Wiltshire, who I believe have not informed their main parent Co but gone ferrel

 

Have you thought about contacting the parent company to make a complaint ? If they know nothing about this, they might ask them to withdraw.

[Basejumper]

That is a very good idea, thanks unclebulgaria67 I will do that in the morning. In the mean time as an update here is the

Edited September 9, 2012 by Basejumper
EDITING TOB - INFO VISABLE

[rennuz]

That is a very good idea, thanks unclebulgaria67 I will do that in the morning. In the mean time as an update here is the

 

[ATTACH]38128[/ATTACH]

 

Any complaint will automatically be dealt with by Intrinsic ,the parent company, this company is an appointed representative of intrinsic. Your points in the letter specifically with regards to fees are set out in an Initial Disclosure Document, which is specific to each firm but ultimately signed off by Intrinsic and I would be very surprised if they can't supply one, whether you have seen it is a different matter and ultimately it does not have to be signed by you. Standard practice for all IFA's is to give an IDD at the initial meeting with the terms of business, this sets out fees, commission etc?

 

Personally if I had received your letter and was in FA's shoes I would not be too worried and as long as my files were compliant I would expect to see a positive result. I must say its very well written and raises a few points but they are ultimately clutching at straws and none of them would be of concern to the IFA if they had offered the correct advice from the start and written the case up correctly. An IFA's job is centred around compliance and ensuring all of these things such as IDD, terms of business, reason why letter are all done correctly and ultimately Intrinsic sign off all work so they take responsibility for it.

 

I would first ask yourself if you remember signing the terms of business and whether you understood it, I am trying not to be patronising but you know what I mean, did you expect them just not to come after you? If you genuinely didn't understand it then that s unfortunate and you have my sympathies.

 

Again as I said before do a deal with them, thats your best bet, if this new guy has got on the case just have a direct chat with him. Reading your letter I used to work with someone of that name, if it's the same bloke he will not be giving you any grief and will do a deal, a good guy but its unlikely it's him. Yes you could peruse it your way and if you do win I would be very interested in seeing how you did it but as I says it's only likely if the adviser did something wrong in the first place.

[Mike_hawk]

Basejumper

 

I can read your details through the marker pen, I'd advise taking the attachment down and trying again.

 

Also, it's been cropped down the right hand border so can't tell if there's anything relevant missing?

 

Does it state what the term commission rate is?

 

Don't know enough about TOB to be of much help, but looking at the logic of the agreement terms....you'd think there'd be an indication of the fee if an early cancellation [term 3] affects the clawback total....... but maybe I'm oversimplifying things.

[Basejumper]

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

 

TOB2.PDF

[Basejumper]

rennuz, I have hopefully dropped a link in here which outlines why I think I am concerned about my TOB and the clauses

 

http://www.fsa.gov.uk/pages/consumerinformation/unfair_contracts/uct_term_changes/commission_clawback.shtml

[rennuz]

rennuz, I have hopefully dropped a link in here which outlines why I think I am concerned about my TOB and the clauses

 

http://www.fsa.gov.uk/pages/consumerinformation/unfair_contracts/uct_term_changes/commission_clawback.shtml

 

The IDD will outline fees but they are unlikely to outline the exact fee for the life insurance product, although A reason why letter will outline the commission payable.

 

This FSA wording is something to hold on to and could put things in your favour and is worth a complaint but again Intrinsic are quite a large firm and for them to not have a water tight terms of business would seem unlikely. You have nothing to lose by complaining about it though, any complaint must go to FA first and they have to give it to intrinsic, you might want to complain to intrinsic as well.