Buyer beware: how Mrs Phillips paid a high price for insurance

Cathy and John Phillips were sold mortgage protection insurance by Leeds Building Society when they bought their house in 1992. But when Mr Phillips' grocery business failed in October 1993 the policy turned out to be useless.

The Leeds was keen to sell the insurance at the time of purchase. The couple were given to understand that the policy guaranteed a year's mortgage interest repayments if Mr Phillips lost his job. Yet the claim was rejected by the insurers, because Mr Phillips was self-employed - a category excluded by the policy.

At no point had the Leeds made this exclusion clear to the couple when they purchased the insurance. "We were told we'd be OK. We had no idea of the stress and the worry we'd go through'' Mrs Phillips says.

When Mrs Phillips wrote to the insurance company demanding their money back - pounds 17.50 each month, for over 18 months - they did not even get a reply.

At the time Mrs Phillips worked at her local council in Brentwood in Essex. She took home pounds 700 a month. But the pounds 300-a-month mortgage repayments meant she was increasingly in debt.

Mrs Phillips was forced to accept voluntary redundancy last April to pay the arrears. Since then Income Support has picked up the bill. But that will also be cut back in October. Dido Sandler