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Sold Mortgage PPI by Financial Advisor
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# 1
stevbm
Old 20-05-2012, 1:44 AM
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Default Sold Mortgage PPI by Financial Advisor

Hi,

apologies if this has been posted before but hope someone can help.

I needed a small mortgage buying my parents house from the council in 2000. After all the discounts and a large whack of wedge put down the mortgage was for 30,000 payable at approximately 250 a month for 15 years.

I used a financial advisor I found through the RMT union (I worked for London Underground at the time) and he set the mortgage up through Northern Rock assuring me it was the best deal - happy days.

BUT he suggested very strongly that I also take out PPI for the value of the house (not the value of the mortgage take note) which under pressure I agreed to although I felt uneasy. I spoke to my brother who suggested this was wrong and when the FA came back to the house to seal the deal I told him I'd changed my mind. His reaction was one of complete surprise and of extreme disappointment and under more pressure I agreed to take PPI but only for the value of the mortgage, not the value of the house. I paid it for a while (a couple of years probably) and then just stopped making the payments.

Originally the payment was to Colonial Life, however this changed to Winterthur Life UK (who I assume bought them out) and I'm wondering if I could claim this money back. I didn't want the PPI and only took it under duress (I was younger then - he'd get the big F OFF nowadays) and considering I was in full time employment and the mortgage was so pitifully small I can't believe it was necessary or required to get the loan.

Can anyone help with advice please? If I'm eligible do I contact Winterthur Life? I only have the Reference number and payment details on old bank statements but nowt else that I can find.

Thanks in advance for any help...
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# 2
knoxvillain
Old 20-05-2012, 7:39 AM
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-----------

Last edited by knoxvillain; 20-05-2012 at 8:49 AM.
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# 3
Moneyineptitude
Old 20-05-2012, 8:53 AM
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Quote:
Originally Posted by stevbm View Post
he suggested very strongly that I also take out PPI for the value of the house (not the value of the mortgage take note) which under pressure I agreed to although I felt uneasy. I spoke to my brother who suggested this was wrong and when the FA came back to the house to seal the deal I told him I'd changed my mind. His reaction was one of complete surprise and of extreme disappointment and under more pressure I agreed to take PPI but only for the value of the mortgage, not the value of the house. I paid it for a while (a couple of years probably) and then just stopped making the payments.
It was and is normal practice for sellers to suggest very strongly that MPPI is taken out because a mortgage is a large sum on which insurance IS advised. MPPI is not normally mis-sold in the manner that loan and credit card PPI was.
You can get far more comprehensive answers to your query if you post it on the mortgage forum here;
http://forums.moneysavingexpert.com/...play.php?f=187
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# 4
dunstonh
Old 20-05-2012, 9:00 AM
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Quote:
BUT he suggested very strongly that I also take out PPI for the value of the house (not the value of the mortgage take note) which under pressure I agreed to although I felt uneasy.
MPPI cannot be taken to the value of the house. It is a monthly benefit typically to around the amount of the mortgage payment (although you can go higher if you wish to protect other things).
Quote:
I spoke to my brother who suggested this was wrong
It is wrong because the product cant do what you say it did.

Quote:
Originally the payment was to Colonial Life, however this changed to Winterthur Life UK (who I assume bought them out) and I'm wondering if I could claim this money back.
It doesnt sound like PPI as Colonial were a life assurance company. Not a general insurance company. Plus, with you miss-describing the product, everything points to it not being PPI.

Quote:
I didn't want the PPI and only took it under duress (I was younger then - he'd get the big F OFF nowadays) and considering I was in full time employment and the mortgage was so pitifully small I can't believe it was necessary or required to get the loan.
You didnt have PPI. You are not under duress. The adviser has a responsibility to make you aware of your areas of need and to disturb you so you can see them.

Quote:
If I'm eligible do I contact Winterthur Life?
They have no liability. You have a mixed up story giving incorrect information. Seems like an easy rejection. Plus, it is pre-regulation and a good chance that the adviser wont have to consider it anyway.
I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 5
stevbm
Old 20-05-2012, 4:40 PM
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Quote:
Originally Posted by dunstonh View Post
MPPI cannot be taken to the value of the house. It is a monthly benefit typically to around the amount of the mortgage payment (although you can go higher if you wish to protect other things).


It is wrong because the product cant do what you say it did.



It doesnt sound like PPI as Colonial were a life assurance company. Not a general insurance company. Plus, with you miss-describing the product, everything points to it not being PPI.



You didnt have PPI. You are not under duress. The adviser has a responsibility to make you aware of your areas of need and to disturb you so you can see them.


They have no liability. You have a mixed up story giving incorrect information. Seems like an easy rejection. Plus, it is pre-regulation and a good chance that the adviser wont have to consider it anyway.
I didn't realise you were there.

He made it clear it was to cover the mortgage payments should i be unable to make the payments, he also made it clear it would not pay out any monies at the end and that it was only for 15 years i.e. the length of the mortgage. This is NOT incorrect information.

If it wasn't MPPI (and lets face it, it was) what do you constructively suggest it was then given the FACTS I've just stated above?
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# 6
src007
Old 20-05-2012, 5:01 PM
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Quote:
Originally Posted by stevbm View Post
I didn't realise you were there.
Not all insurance is a bad idea. The advisor may have been recommending that you take the cover because it was a sensible move?

However even if the advior had told you something incorrect or not allowed you to opt out how can you prove it? It's your word against theirs.
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# 7
dunstonh
Old 20-05-2012, 5:10 PM
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Quote:
He made it clear it was to cover the mortgage payments should i be unable to make the payments, he also made it clear it would not pay out any monies at the end and that it was only for 15 years i.e. the length of the mortgage. This is NOT incorrect information.
That is not what you said in the first post. You said it was recommended for the value of the house (not possible with PPI) then it was taken to the amount being borrowed (not possible with PPI). PPI is issued by general insurance companies. You named a life assurance company.
Quote:
If it wasn't MPPI (and lets face it, it was) what do you constructively suggest it was then given the FACTS I've just stated above?
Your facts keep changing. So, which facts are the ones I should go by?
I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 8
stevbm
Old 20-05-2012, 5:21 PM
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Quote:
Originally Posted by dunstonh View Post
That is not what you said in the first post. You said it was recommended for the value of the house (not possible with PPI) then it was taken to the amount being borrowed (not possible with PPI). PPI is issued by general insurance companies. You named a life assurance company.


Your facts keep changing. So, which facts are the ones I should go by?
I've not contradicted myself. He did initially suggest cover for the value of the house which he downgraded to the value of the mortgage when I objected (after initally agreeing in principle to his first suggestion).

On my bank statements from the time which I found last night the payments were to Colonial Life and then changed to Witherthur UK after some time. He made it clear this was cover and that a dividend was not payable at the end of the 15 years (which is why I had no qualms in stopping the payments). These are the facts as I remember them and I'm sure I'm correct on the events as they happened.

Was it possible accident cover perhaps?
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# 9
stevbm
Old 20-05-2012, 5:56 PM
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Quote:
Originally Posted by src007 View Post
Not all insurance is a bad idea. The advisor may have been recommending that you take the cover because it was a sensible move?

However even if the advior had told you something incorrect or not allowed you to opt out how can you prove it? It's your word against theirs.
Agreed. I'm not trying to nail anyone with this am just wondering out loud. I don't think the advice was sound considering the length and amount of the loan but it was my fault for not refusing it in the first place - he didn't hold a gun to my head after all.

I wonder what his motivation was if I'm honest.
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# 10
dunstonh
Old 20-05-2012, 6:31 PM
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Quote:
I've not contradicted myself. He did initially suggest cover for the value of the house which he downgraded to the value of the mortgage when I objected (after initally agreeing in principle to his first suggestion).
In post #1 you have said value of the house. Then value of the mortgage. In post #5 you say it is the cost of the monthly payments.

So, lets say your house was 120k and your mortgage 30k and monthly payments 250pm. MPPI can only cover the 250pm. It cannot be set up to the value of the house or the amount borrowed. Life assurance and critical illness cover can go to the value of the house or amount borrowed.
I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 11
magpiecottage
Old 20-05-2012, 7:11 PM
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This does not sound right. Colonial Life was taken over by Winterthur but the clue is in the name - Colonial LIFE.

It sound like a LIFE policy which would pay the balance of the mortgage if you died during the term.

It is possible it was a Critical Illness policy which did the same thing if you suffered a qualifying medical condition.

It is also possible that it was in fact a Permanent Health insurance which would pay an income if you were too ill to work.

However, the information you have given all indicates it was NOT a PPI policy.
I run a consultancy to help Independent Financial Advisers to comply with their rules and resolve complaints. Although I am qualified to, I don't advise consumers for reward.
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# 12
stevbm
Old 20-05-2012, 7:15 PM
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Quote:
Originally Posted by dunstonh View Post
In post #1 you have said value of the house. Then value of the mortgage. In post #5 you say it is the cost of the monthly payments.

So, lets say your house was 120k and your mortgage 30k and monthly payments 250pm. MPPI can only cover the 250pm. It cannot be set up to the value of the house or the amount borrowed. Life assurance and critical illness cover can go to the value of the house or amount borrowed.
Quote:
Originally Posted by magpiecottage View Post
This does not sound right. Colonial Life was taken over by Winterthur but the clue is in the name - Colonial LIFE.

It sound like a LIFE policy which would pay the balance of the mortgage if you died during the term.

It is possible it was a Critical Illness policy which did the same thing if you suffered a qualifying medical condition.

It is also possible that it was in fact a Permanent Health insurance which would pay an income if you were too ill to work.

However, the information you have given all indicates it was NOT a PPI policy.
Thanks both. I agree it was most likely an Illness or Health policy.
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# 13
Moneyineptitude
Old 20-05-2012, 7:51 PM
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Originally Posted by stevbm View Post
Thanks both. I agree it was most likely an Illness or Health policy.
Eat humble pie!
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# 14
stevbm
Old 20-05-2012, 8:16 PM
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Originally Posted by Moneyineptitude View Post
Eat humble pie!
Ha...I got the answer in the end which is all I wanted....thanks to all for replying.
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