Insurance mis-selling with mortgages

AndyinTenerife · 24-04-2009, 16:26

I have had a couple of people come to me looking to remortgage and found they have an insurance tie-in which seems to be particularly tricky to undo.

Two banks in particular seem to do this a lot - S*******r and S*****k
the way it works is the annual life insurance premium is multiplied by the term of the mortgage and added to the total sum borrowed.
So, a couple who may pay 150€ a year each end up having 250€ x 2 x 35 (years) added to their mortgage - a total of 17,500€ for example.

This means they end up paying interest on this amount for the term of their mortgage as well - typically 5% repayment over 35 years would amount to approx 37,000€!!!
A cannot think of a worse way to buy insurance.... This kind of upfront lump-sum selling has been all but outlawed in the UK recently as it was deemed unfair and in no way in the best interests of the client.

Has anyone successfully managed to get any of the original amount back whilst subrogating their mortgage to another bank?
I tried contacting the Direccion General de Seguros for advice but they told me to write a letter - then never replied or acknowledged receipt.
Lawyers here in Tenerife don't seem to have much idea about what will happen either

gal · 01-05-2009, 08:15

In answer to your question Yes and No when we were purchasing we were asked to call in to the bank to sign some papers before we completed the next day it was late afternoon when we got the call so found ourselves "locked in at the bank" to sign some paper.
They quoted us something like 2,000 euros for a years life insurance so we told them no, we would get our own, they also quoted around 500 euros for buildings and contents which we also declined.
So some 3 weeks later we were very unhappy to find our account had been debited 2500 without our consent. We went in and accused them of thief which they panicked at to say the least.
Straight away the buildings money was refunded to our account it took 3 more trips and a monthbefore we got the other money back they originally charged us 134 euros admin fee we stuck out and got all but 1 euro refunded so just beware of the banks and stand your ground they are out to get your money

24-04-2009, 16:26	#1 (permalink)
AndyinTenerife AndyinTenerife is.... Regular Member Join Date: Mar 2009 Location: Tenerife Posts: 20 Thanks: 5 Thanked 0 Times in 0 Posts Rep Power: 0	Insurance mis-selling with mortgages I have had a couple of people come to me looking to remortgage and found they have an insurance tie-in which seems to be particularly tricky to undo. Two banks in particular seem to do this a lot - S*****r and S*k the way it works is the annual life insurance premium is multiplied by the term of the mortgage and added to the total sum borrowed. So, a couple who may pay 150€ a year each end up having 250€ x 2 x 35 (years) added to their mortgage - a total of 17,500€ for example. This means they end up paying interest on this amount for the term of their mortgage as well - typically 5% repayment over 35 years would amount to approx 37,000€!!!** A cannot think of a worse way to buy insurance.... This kind of upfront lump-sum selling has been all but outlawed in the UK recently as it was deemed unfair and in no way in the best interests of the client. Has anyone successfully managed to get any of the original amount back whilst subrogating their mortgage to another bank? I tried contacting the Direccion General de Seguros for advice but they told me to write a letter - then never replied or acknowledged receipt. Lawyers here in Tenerife don't seem to have much idea about what will happen either

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01-05-2009, 08:15	#2 (permalink)
gal gal is.... Regular Member Join Date: Apr 2009 Location: san miguel de salinas Posts: 47 Thanks: 0 Thanked 1 Time in 1 Post Rep Power: 0	In answer to your question Yes and No when we were purchasing we were asked to call in to the bank to sign some papers before we completed the next day it was late afternoon when we got the call so found ourselves "locked in at the bank" to sign some paper. They quoted us something like 2,000 euros for a years life insurance so we told them no, we would get our own, they also quoted around 500 euros for buildings and contents which we also declined. So some 3 weeks later we were very unhappy to find our account had been debited 2500 without our consent. We went in and accused them of thief which they panicked at to say the least. Straight away the buildings money was refunded to our account it took 3 more trips and a monthbefore we got the other money back they originally charged us 134 euros admin fee we stuck out and got all but 1 euro refunded so just beware of the banks and stand your ground they are out to get your money

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