All Topics / Legal & Accounting / LMI refunds – CBA

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  • Profile photo of whitehousemaxwhitehousemax
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    @whitehousemax
    Join Date: 2010
    Post Count: 10

    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

    Profile photo of bouncecfbouncecf
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    @bouncecf
    Join Date: 2010
    Post Count: 14

    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!

    Profile photo of BrisbaneAndyBrisbaneAndy
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    @brisbaneandy
    Join Date: 2009
    Post Count: 45

    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!

    Profile photo of whitehousemaxwhitehousemax
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    @whitehousemax
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    Thanks for your feedback guys! Much appreciated.

    I hope someone out there can help though :(

    Profile photo of KingandyKingandy
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    @kingandy
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    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   [email protected] for a complete update.

    Andy

    Profile photo of KingandyKingandy
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    @kingandy
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    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.

    Profile photo of Dan42Dan42
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    @dan42
    Join Date: 2008
    Post Count: 620
    Kingandy wrote:
    .. " 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.

    Profile photo of whitehousemaxwhitehousemax
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    @whitehousemax
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    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

    Profile photo of KingandyKingandy
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    @kingandy
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    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.

    Profile photo of TroodygTroodyg
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    @troodyg
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    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

    Profile photo of KingandyKingandy
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    @kingandy
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    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.

    Profile photo of whitehousemaxwhitehousemax
    Member
    @whitehousemax
    Join Date: 2010
    Post Count: 10

    ***
    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.

    Profile photo of Ben KBen K
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    @ben-k
    Join Date: 2010
    Post Count: 103

    well done,

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

    Profile photo of yeohktyeohkt
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    @yeohkt
    Join Date: 2006
    Post Count: 2

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

    Profile photo of j900j900
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    @j900
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    Weldone Whitehousemax. And thank you for sharing your experience!

    Profile photo of GuruBobGuruBob
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    Join Date: 2012
    Post Count: 3

    WhitehouseMax,

    I’ve just found your comments here from 2010. I bought a house but had to sell due to various reasons and had about $25,000 in mortgage insurance. I was buying another property and there was 1 month between the settlements. CBA wouldn’t move the mortgage over so I had to start again. ( with another bank ).

    I have been looking though all my original bank documentation and there are absolutely no terms and conditions on the LMI. Also they were ‘arranged’ by CBA. I hold them therefore as the party I took the LMI out with.

    I’m intending to go in hard and say they owe me pretty much it all back, on a pro-rata basis.

    Did you have any original documentation from the bank about what the terms and conditions you entered into?

    Cheers

    Rob

    Profile photo of GuruBobGuruBob
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    Post Count: 3

    WhitehouseMax,

    I’ve just found your comments here from 2010. I bought a house but had to sell due to various reasons and had about $25,000 in mortgage insurance. I was buying another property and there was 1 month between the settlements. CBA wouldn’t move the mortgage over so I had to start again. ( with another bank ).

    I have been looking though all my original bank documentation and there are absolutely no terms and conditions on the LMI. Also they were ‘arranged’ by CBA. I hold them therefore as the party I took the LMI out with.

    I’m intending to go in hard and say they owe me pretty much it all back, on a pro-rata basis.

    Did you have any original documentation from the bank about what the terms and conditions you entered into?

    Cheers

    Rob

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Hi Rob

    Hate to say the days of Gemworth approving a refund have been and gone so think you will struggle there.

    Might get CBA to refund something as an act of goodwill.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of GuruBobGuruBob
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    Hi Richard,

    I agree with you there is not much point approaching Gemworth. I’m thinking though that CBA have effectively sub-contracted out the LMI and that the CBA are the responsible party. I didn’t sign anything from Gemworth and all CBA have said is they costed in an ‘arrangement’ fee. Who knows what happened to my money, I certainly didnt give it directly to Gemworth.

    As CBA provided no terms and conditions as far as I’m aware, of what they were providing. I’m thinking I could complain to the Financial Ombusman saying there was no ‘product’ delivered and therefore no contract.

    I’m not a lawyer, I do though deal with contracts in the building industry and this situation has got me interested in how these LMI arrangements work.

    Regards

    Rob

    Profile photo of whitehousemaxwhitehousemax
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    @whitehousemax
    Join Date: 2010
    Post Count: 10

    Hi Rob,

    Apologies for not getting back to you sooner, but I hadn't received any notifications about the last few posts.

    There were no documents provided to me regarding the terms and conditions around LMI (let alone refunds), and I raised this issue of non-disclosure with FOS as CBA should have either: a) disclosed the T&Cs for the LMI product; or b) disclosed the separate agreement they have with Genworth, so that an informed decision could be made.

    I have Genworth's policy re LMI refunds (which the bank liked to refer to) and am also happy to provide you correspondence I have had between CBA, Genworth, and FOS.

    Let me know if you would like me to send these through.

    Cheers,

    Max

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