LMI refunds - CBA

Hi everyone,

I hope someone can help me.

I bought a property in November 2008, which I recently sold (in June 2010). When the loan was established, I paid about $10000 in LMI.

As such, based on what I've heard, I rang the very unhelpful and unprofessional CBA mobile banker only to be told I'm not eligible for a refund. Given her vague response, I did my own research and came across Genworth's policy regarding cancellations: http://www.genworth.com.au/lenderresourcecentre/Forms/cancellations/index.htm. According to this, I am eligble for a 20% refund.

I tick all those boxes, so I contacted the broker who referred me to her boss, and again I was told that I'm not eligible. She stated that CBA has their own agreement with Genworth, and so Genworth's policy doesn't apply.

Can someone please help me out? What is the legal argument to this? Since the LMI is paid by me to protect the bank's money, and Genworth's policy says I'm eligible, am I legally entitled to the partial refund? Or is the CBA "protected" by the agreement they have with Genworth?

Lastly, should I take this further? If so, to whom?

Thank you in advance.

Regards,

Max

Wow how interesting - I had no idea you could get refunds on LMI premiums. Learn something new every day I guess :) It does say on the Genworth page that no refund is applicable where a separate agreement exists between Genworth and the lender, so maybe that's what CBA is referring to?
Have you tried contacting Genworth directly, or lodging a refund claim with them? That would be my next move.
Interested to see what eventuates, good luck!

When I was with the CBA (over 12mths ago now) it was procedure that you had to apply to Genworth directly, about all we could do was look up their website and give you the phone number!

Sorry I can't on whether CBA have a separate agreement with Genworth now though.  Good luck!

Thanks for your feedback guys! Much appreciated.

I hope someone out there can help though :(

Max

I have also been recently involved in the same scenario. I am also with CBA. I am trying to get to the bottom of WHO is trying to keep my money. CBA or Genworth.
e-mail me at   kingandy@y7mail.com for a complete update.

Andy

For the benefit of the other users of the site. If you have a normal home loan with CBA, covered by LMI with Genworth, and you sell before 2 years, you are entitled to a partial premium refund of 20-40%. When you go to ask for it, CBA is supposed to fill in a form and send it to Genworth.
Genworth then refuse to pay, because they have added a clause in the terms and conditions which says that a refund is not payable "where special arrangements are in place with the lender in return for a reduced premium". We got no such reduced premium, and Genworth will not refund anything. They blame CBA and CBA blame them.. Nice cushy little agreement going on there, smelling a bit like a cartel...." Let's get together and screw the client.. " Mr Pratt got into a shipload of trouble for far less than that.

Unless the refunds not returned totals over $500 million, then they haven't made it to Dick Pratt territory.

Hi Andy,

Good to see there are others who are willing to take matters further. I had complained to FOS about a month ago and got a response back from CBA last week. Having given CBA a chance to resolve the matter, but to no avail, it is now with FOS for their investigation.
I will email you tonight a copy of the "final report" I got from CBA where they make their case (ie. denying responsibility). Mind you, it took the "Customer Experience Specialist" three attempts to send me a correct report as he had incorrect figures and references throughout the document.

My dispute to FOS is this:
"
 I paid $11397 to the CBA for Lender's Mortgage Insurance, for a loan that was established on 24 November 2008. Recently, I paid out the loan and subsequently made enquiries into getting some of this fee back. Unfortunately, although CBA's insurer (Genworth) has an Underwriting Policy which would entitle me to a refund of 20%, the CBA apparently has their own undisclosed agreement with Genworth which means, according to CBA, I am not entitled to get anything back. Refer to news article http://au.todaytonight.yahoo.com/article/36014 which refers to banks not disclosing all information to consumers. The CBA didn't advise, clarify, nor provide information as to their policy on refunding mortgage insurance premiums. The CBA did not advise me that they have their own agreement with Genworth which nullifies my right, under Genworth's Policy, to receive a refund. The CBA didn't provide any documentation from Genworth advising of the agreement between Genworth and CBA.
"

I believe it comes down to CBA not fully disclosing the product, but could be seen as misleading consumers. As far as CBA-Genworth blame-game goes, CBA has accepted the money (on behalf of Genworth), so I'm going after them.
When I hear back, I will let you know.

Cheers,

Max

Call me sceptical (glass 1/2 empty) sort of guy.. But I have complained to BSA about shoddy building practices, The Law Institute about a Lawyer who did not adhere to his own (no sale no pay) conveyancing slogan.. And  I am taking on Genworth and CBA about amounts of money I feel that I have a right to get back...
I have NEVER won any of these.. and I am not that confident that I will get anywhere here either. I think we all have some false sense of security with these Government orgs,and I am starting to think that they sit at their desks all day thinking up ways to get rid of you, or writing new policies that will certainly send you packing when you think you my have some rights.. All at the expense of the taxpayers...  It's like running to Himler to complain about Hitler about your rights...
Paul Keating beat a red lght camera fine yesterday.. If YOU try that, you will not only get the fine... You will pay legal costs and most likely be jailed for complaining.. He is a wealthy ex-politician with contacts and influence. Any idiot should not know that.

Kingandy,

I have no idea about the legalities of the post I just wanted to say sceptic or not good on you anyway for making a stand. I always think even if nothing comes of it at least it may make them consider doing the same thing next time to some else (or get  a better lawyer- yes scepticism can be healthy!)

To give you a bit of a boost we recently had a regular everyday normal friend (normal = not a wealthy ex politician with contacts and influences) who has just done exactly what Paul Keating did and through a year long process and a few court hearings and sticking to his guns, managed to prove that his speeding ticket could not be proven beyond reasonable doubt because they momentarily lost sight of him. He had all his costs paid out to him. Sometimes the little guy can win

Troodyg

Whitehousemax has done a lot more than me according to the stuff he has sent. We have not given up just yet..
Thanx for ur input.

***
SUCCESS! The offer below by CBA is 10% of the LMI fee paid, rather than the 20% that I believe I was entitled under the Genworth Policy. A slight win though is better than no win at all. I hope this serves others who are with CBA and have paid LMI and paid out their loans in the first or second year.
***

From: ***@cba.com.au
To: ***@hotmail.com
Date: Fri, 22 Oct 2010 12:32:05 +1100
Subject: RE: Financial Ombudsman Case #222679, CBA Case # 440703 - ANDERSEN

Good Afternoon Mr Andersen

RE: Financial Ombudsman Case #222679, CBA Case # 440703 – ANDERSEN

I am writing regarding your complaint registered with the Financial Ombudsman Service (‘FOS’).

Thank you for taking the time to speak with me again today.  I apologise for the concern this matter has caused you.

As discussed, the Bank is prepared to offer you the amount of $1,140.00 to resolve your complaint.  This offer is made as a gesture of goodwill and without the admission of liability.

If you wish to accept this offer, please complete and return the attached resolution agreement to me via email or fax on 02 9841 7700 by Friday 29 October 2010.  I will arrange for the payment to be credited to your account on the day I receive your signed agreement.

If you have any questions about this email, or wish to provide additional information about your complaint, please contact me on               (02) 9841 6483         (02) 9841 6483, Monday to Friday 9:00am – 5.00pm (AEDST).

Yours sincerely

__________________________________________________

Commonwealth Bank
Peter Cash
Customer Experience Manager (Banking & Finance)
CBA Group Customer Relations

Level 19, 150 George Street
Parramatta NSW 2150
P:               (02) 9841 6483         (02) 9841 6483
F: 1800 028 542

E: ***@cba.com.au

Determined to put a smile on Australia’s face. Thanks for helping make us Money magazine’s Bank of the Year.

well done,

this is scary stuff, most definately makes me want to stay away from LMI all together

Ben K

great, I might just email peter cash from cba and ask....

Weldone Whitehousemax. And thank you for sharing your experience!