A few years ago I decided to take out an income protection policy as I was working in a volatile industry from which I'd been made redundant a couple of times previously. I asked my local broker to find me a suitable policy, which he duly did. When the documents were sent for me to sign I queried a couple of points which I didn't think were right, but was reassured by the broker it was what I was asking for. Fast forward 3 years and I'm made redundant and start claiming for around £1000 per month (which is what I'd signed up and paid premiums for). The insurance company informed me that because the policy was a Mortgage protection policy and my mortgage was only quite low, the maximum they were entitled to pay was about £400. Obviously I took this up with the broker who, on my behalf, started investigations into the policy being mis-sold to them (and consequentially to me). Long story short - the broker lost their case but used their PI cover to ensure I was paid up to the correct amount each month. Result - I came out of it without loss of payment due to the broker being decent and honest.
Now fast forward again - after 15 months out of work I finally found a job, which I have been doing for nearly a year. I have received a letter from the insurer (not the broker) saying that they have looked again at my complaint and, without changing the policy or accepting any responsibility, have decided that the wording could have been misunderstood and have made a one-off payment to the value of their initial underpayment. In other words, they have finally paid up the full amount, which has already been paid to me by the broker. Double bubble.
Now the question: am I legally entitled to keep the money?
Morally I should contact the broker and discuss it with him, but it was his insurance that paid out not him personally.
The insurance company have always contacted me directly after the policy was initially set up by the broker and I'm almost certain they won't have copied him in on any of the recent corespondance.
I'm normally a very honest person, but I've been forced to change career after 25 years and have had to accept a job paying just over half my previous salary. The £7000 checque would be very useful.
What's my legal position on this?
Logic says that you cannot be paid twice, but if you keep it, in future someone might want it back.
You need proper Legal advice on this one. You should be able to get half hour free advice from a Solicitor.
Legally you have a civil duty to return any money given to you if you cannot reasonably believe that the money is due to you. If you fail to return that money it then becomes a criminal offence. So if you spend the money and then cannot pay it back if requested, you have committed a criminal offence.
You absolutely are not entitled to keep this money. If you do it could be deemed theft. The money belongs to the broker's PI insurer. While the money may be useful in the short term, it is quite likely that the insurance companies will talk to each other eventually and find you out.