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  • FIRST POST
    • Preshous
    • By Preshous 4th Dec 17, 8:22 PM
    • 2Posts
    • 0Thanks
    Preshous
    Does this class as PPI?
    • #1
    • 4th Dec 17, 8:22 PM
    Does this class as PPI? 4th Dec 17 at 8:22 PM
    Hi there,

    I am just wanting to explain my situation and see what you all think. Depending on where I read my situation sounds like a PPI claim but doesn't on other websites.

    Back in 2015 my wife and I got a mortgage from a mortgage advisor, part of the process was also getting Personal Sick Pay through LV with the Mortgage Advisor, he insisted that we had to take this for financial stability and was insisting that if we wanted the mortgage then we had to take his insurances otherwise it was not worth taking any including the mortgage. We got the Personal Sick Pay and aswell as Life insurances but I managed to cancel the Life insurances during the term and get my own which is when it got ugly with the Mortgage Advisor and in the end he just stopped talking to us. I remember signing something for the Personal Sick Pay which said something along the lines of "If we cancel during a term of ** years and we will have to pay the £700 commission back to the mortgage advisor company" I believed the term was 2 years and I could cancel and after a year I was more financially stable and was advised by people around me that I shouldn't need it and should cancel so I waited the 2 years remembering the paper we signed which it turns out I don't have a copy, when I called LV to cancel they said it was 5 years and if I cancelled i would incur the £700 charge.

    I dont want this insurance and never really have wanted. Does this class as PPI due to aggressive tactics or not? If so what would be the best approach since I am still paying.

    Thank you for your time.

    Regards

    Preshous
Page 1
    • dunstonh
    • By dunstonh 4th Dec 17, 9:01 PM
    • 89,848 Posts
    • 56,498 Thanks
    dunstonh
    • #2
    • 4th Dec 17, 9:01 PM
    • #2
    • 4th Dec 17, 9:01 PM
    Back in 2015 my wife and I got a mortgage from a mortgage advisor, part of the process was also getting Personal Sick Pay through LV with the Mortgage Advisor, he insisted that we had to take this for financial stability and was insisting that if we wanted the mortgage then we had to take his insurances otherwise it was not worth taking any including the mortgage.
    it is a very common business model for mortgage advisers to give free advice as long as you purchase an insurance product with them. That model is allowed as long as the insurance is suitable.

    We got the Personal Sick Pay and aswell as Life insurances but I managed to cancel the Life insurances during the term and get my own
    The LV income protection is not bad and not one that is typically available on the comparison sites. are you sure you got like for like?

    which is when it got ugly with the Mortgage Advisor and in the end he just stopped talking to us. I remember signing something for the Personal Sick Pay which said something along the lines of "If we cancel during a term of ** years and we will have to pay the £700 commission back to the mortgage advisor company" I believed the term was 2 years
    This supports that fact that the commission was being used to pay for the advice as mentioned above. Commission clawback clauses are quite common.

    My firm has used them in the past and on one occasion taken someone to the small claims court who thought they were being clever by avoiding the fee. The judge ruled in our favour as the fee agreement was clear and fair.

    after a year I was more financially stable and was advised by people around me that I shouldn't need it
    So, people around you thought that it was a good idea that you did not protect your income. Madness.

    when I called LV to cancel they said it was 5 years and if I cancelled i would incur the £700 charge.
    LV would not know what your fee agreement with the adviser is.

    Does this class as PPI due to aggressive tactics or not?
    No, its not PPI any more than your house insurance is.

    Also, it is not aggressive tactics. commission offset of a fee is quite legitimate and for many people, makes advice affordable and can actually result in lower premiums/costs than going on pure commission or pure fee basis.

    If you agree for that method and that is how the adviser is going to get paid, then there is nothing wrong with that. To be honest, you are effectively the aggressor here by trying to break your contract and get out of the commitment. I am sure you wouldn't like it if you did a load of work and then your boss decided not to pay as people around him said what you did was not worth it.
    I am an Independent Financial Adviser (IFA). 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 an Independent Financial Adviser local to you.
    • Preshous
    • By Preshous 4th Dec 17, 9:33 PM
    • 2 Posts
    • 0 Thanks
    Preshous
    • #3
    • 4th Dec 17, 9:33 PM
    • #3
    • 4th Dec 17, 9:33 PM
    I would understand more if we didnt pay a fee but we did actually pay a fee for his services. My point is that he basically said we had to take it or there was no mortgage.
    • dunstonh
    • By dunstonh 4th Dec 17, 9:36 PM
    • 89,848 Posts
    • 56,498 Thanks
    dunstonh
    • #4
    • 4th Dec 17, 9:36 PM
    • #4
    • 4th Dec 17, 9:36 PM
    I would understand more if we didnt pay a fee but we did actually pay a fee for his services. My point is that he basically said we had to take it or there was no mortgage.
    Originally posted by Preshous
    I have heard of commission and fee. Tends to happen where house prices are lower (so commissions tend to be low) or where business costs are higher (such as city locations with high rents etc).

    Again, it is allowed as long as it is agreed with you in advance.

    If you didnt agree it, then the mortgage advice would not give advice or set up the mortgage. Your choice at that stage is to agree it or walk away and find another one.
    I am an Independent Financial Adviser (IFA). 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 an Independent Financial Adviser local to you.
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