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Perils of credit insurance


A rather cautionary tale from this sector and one that has left a bitter taste in a client’s mouth. 

My client took out insurance paying an additional premium to obtain extended cover on two particular clients. One in particular was vital. the cover was granted but admittedly not guaranteed for a period of time (something i believe the broker should have highlighted)

Almost immediately after signing the contract the cover was slashed from 20k to zero. 

Now you can imagine the clients reaction. Cover can be withdrawn for a number of reasons of course and of these most can be cross referenced. However one criteria cannot be checked by a third party. That is cover withdrawn due to late payments by the client to their suppliers. 

And guess what?

Now my belief is that this was strictly by the book and nothing underhand was at play but to an outsider it would look like a cynical attempt to get the client to agree to a contract and then withdraw cover 

Misselling is a big issue in the consumer market of course. Could we see this spill over to the business market? I am not suggesting directly that this was mis-sold. but we know that many finance providers are very close to the mark. To put it kindly

I am advising my client here and helping present a case. He will will not pay the premium and the fight goes on.  

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