I'm not too sure if this has been covered elsewhere but I couldn't find it and I guess each persons case is different, so here goes...
I'm assisting someone at the moment who was a longtime customer of one of the large banks. She was sold a life cover policy as part of a mortgage some years ago. At the time she was single without any dependents. The bank sold her a life policy which was for MORE than the mortgage principal (which was itself a capital repayment mortgage), plus the cover was increased annually inflation/indexation.
A number of years later the bank contacted her to review her cover, again she was single without any dependents, yet the bank persuaded her to increase her cover and include critical illness.
I am a friend of hers and got involved when she told me how much she was paying for life cover.
She is/was not financially savvy and I have no doubt she was led on a merry dance by the salesperson - but (and here is the problem), she did sign the piece of the form where it says "I understand this policy may not be the cheapest.. Etc".
I have contacted the bank and got a firm response that they did everything by the book and the client was aware of the "extras".
I'm unsure about the next step:
- I am aware she signed the disclaimer, but she genuinely believed the bank were on her side, so did not think to question them.
- is there any valid reason for indexation and cover exceeding the mortgage principal?
- should I get the ombudsman involved?
In summary, I can see where her case is weak, but in my opinion the bank absolutely took advantage of her naivety.
Any thoughts?
Dave
I'm assisting someone at the moment who was a longtime customer of one of the large banks. She was sold a life cover policy as part of a mortgage some years ago. At the time she was single without any dependents. The bank sold her a life policy which was for MORE than the mortgage principal (which was itself a capital repayment mortgage), plus the cover was increased annually inflation/indexation.
A number of years later the bank contacted her to review her cover, again she was single without any dependents, yet the bank persuaded her to increase her cover and include critical illness.
I am a friend of hers and got involved when she told me how much she was paying for life cover.
She is/was not financially savvy and I have no doubt she was led on a merry dance by the salesperson - but (and here is the problem), she did sign the piece of the form where it says "I understand this policy may not be the cheapest.. Etc".
I have contacted the bank and got a firm response that they did everything by the book and the client was aware of the "extras".
I'm unsure about the next step:
- I am aware she signed the disclaimer, but she genuinely believed the bank were on her side, so did not think to question them.
- is there any valid reason for indexation and cover exceeding the mortgage principal?
- should I get the ombudsman involved?
In summary, I can see where her case is weak, but in my opinion the bank absolutely took advantage of her naivety.
Any thoughts?
Dave