ABSA - EVERGREEN LIFE INSURANCE POLICIES PAID VIA MORTGAGE BOND ACCOUNT

Absa financed the purchase of our house during November 2003. We were required to take out life insurance policies on the mortgage bond, one for my husband and another for myself. We were recruited by an ABSA consultant, Ms Laura Meyer. We signed off on forms that provided for an annual load of the life insurance policies on the mortgage bond account - the life insurance policies being the key issue of complaint.

The life policies provided for an annual increase of compounded interest of 15% and 10%, respectively. We currently pay about R18'000 per year on the one policy and about R4'800 on the other, a total annual premium of just over R22'000 on life policies where a maximum of R320'000 would be paid out in the event of death. It also has a type of endowment attached to the policy - the excessive charge is an issue frowned upon by those in the know. Even regarded as ********* that we were lured into this pricey commitment.

The forms that we signed with the Bank provide that the annual life insurance premiums get loaded to the outstanding balance on the mortgage bond. The impact of this provision - which we only understood more recently after persistent enquiries with ABSA - is that the annual premium load inflates the outstanding balance on the mortgage bond and results in increased interest year on year. This explained the fact that the balance on the bond reduced only marginally over the past 18 years.

We signed for the annual premium load, but the consultant never advised us of the financial implications thereof, otherwise we would never have agreed to it. We could from the onset comfortably afford the payment of the life insurance from a separate account, but we were nudged into signing for an annual premium load on the mortgage bond. There could not have been consensus on this aspect because the implications and financial exposure was not disclosed to us. This aspect appears no where in any of the documents that we signed.

In October 2020 we again went to the ABSA Vincent Park and was assisted by one of the senior managers, a Ms Ndleleni, but she ignored our cry for assistance. None of our emails were responded to. We also raised the issue with ABSA life insurance department, there too there was no assistance.

A financial advisor eventually informed us about the Ombudsman for long term insurance, which we approached. We asked the Ombudsman to have ABSA correct the issue by separating the life insurance premium payments from the mortgage bond account, that a recalculation of the mortgage bond account be done and that all interest that was paid as a result of the annual load and bloated interest on the mortgage bond account, be returned to us. We are not happy to have paid interest as a result of life insurance policies... it does not make sense. payment of interest on the mortgage bond account is understood, but not anything more than that. This matter has been dragging in the Office of the Ombudsman with no end in sight and unfortunately no clear directive towards a determination of any of the issues. All that has happened thus far is that exchanges between ourselves and ABSA have been facilitated.

It was only towards the end of the annual cycle - October 2021 - after extensive engagement on the issue that we were allowed to have the life insurance premiums paid from a separate account. This is not what factually transpired.

Again, on 1 November 2021, after continued requests and pleading with ABSA we received communication that the larger life insurance premium could be paid from a separate account. The smaller life insurance policy annual amount was then deducted from the separate account WITHOUT any authorisation. We asked for monthly deductions, ABSA of own accord effected a deduction of an annual premium to our disadvantage. The matter was reported to them the very next day. ABSA was requested to correct the issue, but we were told that their error was of technical nature and it would take time to correct. This is still the case, even after the Vincent ABSA Bank Manager, Ms Koboka, was approached. She in fact helped with separation of the premiums from the mortgage bond account, but she has not been able to correct the more recent issue where an unauthorised deduction of an annual payment was made.

We believe that the house should have been paid up a long while ago. We trusted our banker to offer us the best financial management and advice, but we believe that we were deceived in our dealings with ABSA. We are honest people. We do not expect anything for free, we are prepared to pay for the material things that we acquire in life. We do not expect of a giant like ABSA to exploit us in this manner. How many other people have been exposed to situations like these... how many others have lost their livelihoods in this manner.

We are stressed about how ABSA - our banker for over 3 decades - now comes through as having deceived us all along and continues to manage our financial affairs for their own benefit. I personally signed up as a customer of ABSA when it was still the TRUST Bank, There is NO longer a relationship of trust. It is now a long haul of frustration.

Please help us to expose the Bank for the unresolved issues and the continued crafty dealings with us.

We thank you.

Michelle