Mppi

LoopyPrune

3 years ago we used a broker to take out a mortgage. We were rather green and he could have sold us sand in the desert as we totally thought he was acting in our best interests as his fee at the time was £1995. We signed for a 3 year MPPI policy which he added to the mortage a total of £997. The policy has just run out on May 26th and the provider sent us a letter offering £15.00 per month for the same policy, the broker also recontacted us offering a better deal at £9.90 a month. This was for about £330 cover per month.

Now alarm bells have started ringing:

1. Has the broker mis-sold the original policy at a hugely inflated rate.

2. My company would pick up my full salary for 6 months and after that at their discretion, if I was unable to work through accident or sickness anyhow so that part is pretty useless to me. And the broker knew this when we took out the policy

Do I have a case against the broker or have I just been green and put it down to lack of experience in the mortgage market?

P.S. My current mortgage payments are £215 and therefore I have not bothered taking out another policy as just think MPPI for such a small mortgage is money down the drain.

di3004

LoopyPrune wrote: »

3 years ago we used a broker to take out a mortgage. We were rather green and he could have sold us sand in the desert as we totally thought he was acting in our best interests as his fee at the time was £1995. We signed for a 3 year MPPI policy which he added to the mortage a total of £997. The policy has just run out on May 26th and the provider sent us a letter offering £15.00 per month for the same policy, the broker also recontacted us offering a better deal at £9.90 a month. This was for about £330 cover per month.

Now alarm bells have started ringing:

1. Has the broker mis-sold the original policy at a hugely inflated rate.

2. My company would pick up my full salary for 6 months and after that at their discretion, if I was unable to work through accident or sickness anyhow so that part is pretty useless to me. And the broker knew this when we took out the policy

Do I have a case against the broker or have I just been green and put it down to lack of experience in the mortgage market?

P.S. My current mortgage payments are £215 and therefore I have not bothered taking out another policy as just think MPPI for such a small mortgage is money down the drain.

Hi there

As you know its always best to have protection for your mortgage, but you do and should have had the choice to purchase your own to suit your requirements.

I think Dunstonh may be able to give some advice on this matter for you, as its in regards of mortgages, but to what I know of if you were mis sold, you can complain and try to reclaim on the policy, where-as you write to the ones who arranged this for you.

Just like loan ppi, there is some useful information in the link below, with templates...follow the guidelines of reclaiming and hopefully Dunstonh will be along at some point with some info for you, good luck.;)
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance

dunstonh

1. Has the broker mis-sold the original policy at a hugely inflated rate.

Yes and no. The price is not something you can complain about. Tied agents, for example, are always more expensive than IFAs. As long as the price is agreed in advance then there is no mis-sale. However, it sounds like yours was a single premium and added to the mortgage and over 90% of these are classed as mis-sales as you could have done monthly and not from the mortgage (so no interest on it).

2. My company would pick up my full salary for 6 months and after that at their discretion, if I was unable to work through accident or sickness anyhow so that part is pretty useless to me. And the broker knew this when we took out the policy

If it was PPI then there would be an overlap of benefits and the PPI wouldnt pay out in those areas whilst the work benefits are being paid.. However, as its MPPI then there isnt a problem with that as they can be paid out in addition to work benefits. Again, if its a tied agent then MPPI may be all they had available and they only have to recommend the best solution from their product range. If it was an IFA then you would expect them to have recommended a standalone unemployment plan with a PHI policy to match the work benefits as they do have access to policies that can fit your needs.

Was your broker a tied agent or an IFA? (note whole of market for mortgages is not an indication of that as most are whole of market for mortgages, regardless of their status)

It looks like the single premium area is the key thing here. There could be a case on the other things but only if its an IFA and not a tied agent. You shouldnt expect to get best advice from a tied agent. Its not possible for them to do it. Their remit is to give best advice within their product range and recommend the closest match they have. You should expect best advice from an IFA as there is no need for compromise as they can access all products and do have the remit to act in your best interests.

LoopyPrune

They are a tied agent after reading their key facts:

We only offer products from Commitments Protection Ltd for Mortgage Payment Protection (Accident, Sickness and/or Redundancy Cover)

Now do I try the single premium approach or should I check to see why they didnt just offer me Redundancy Cover?

dunstonh

As its a tied agent, they are covered for not recommended the best product as they didnt have the best product. Their remit is to offer the best product in their range (of one!). They cant offer you what they dont have. Its always a risk when seeing a tied agent.

However, the single premium complaint is a goer all by itself and doesnt need anything else to support it. There is absolutely no reason for them to recommend single premium MPPI. (hence the over 90% success rate on complaints about single premium PPI).

LoopyPrune

Today we recieved a call from Claims4Refunds whoever they may be. Told they would be sending an info pack on how to reclaim our mppi payment. OH took call but she said they already knew everything about us.

1. How the hell do they know we paid out mppi as a single premium or are they taking a shot in the dark?

2. If they are sniffing about they surely I must be in with a chance on reclaiming my payment or why would they bother spending money on a phone call to us?

3. Do I go after the broker who sold the mortagage and mppi or after the lender as they seem to think its preffered mortgages who mis-sold the policy and not home and county mortgage services?

dunstonh

1. How the hell do they know we paid out mppi as a single premium or are they taking a shot in the dark?

A lot of ex advisers or financial services staff have gone into claims companies and brought lists with them or sold lists.

2. If they are sniffing about they surely I must be in with a chance on reclaiming my payment or why would they bother spending money on a phone call to us?

Dont count on it. A few of the really dodgy ones are cold calling on contracting out of SERPS and that only has a 1.5% chance of success. The money is in the up front payment.

3. Do I go after the broker who sold the mortagage and mppi or after the lender as they seem to think its preffered mortgages who mis-sold the policy and not home and county mortgage services?

Always the advising firm (unless the advising firm is a tied agent of the insurer).

Your case is easy. You dont need a claims company. A short letter stating that you believe the sale of single premium PPI was not appropriate as monthly premium would have been more suitable. You dont need to waffle or try and thicken the letter out. Short and sweet and to the point is all that is needed.

LoopyPrune

Yer finally tracked down Claims4Refund and found out that if successful they want 29%+VAT of the payout or £99 if unsuccessful

Funny thing is they say this covers the following costs:

- Client support (Email/Post/Telephone)
- Expert legal advice and vetting procedures
- Staff and specialist consultants
- IT systems
- Depreciation of assets related to claims management
- Postage and packaging
- Directors/SMT cancellation meetings and decision processes
- Cancellation investigation and auditing
- Preparation of claims
- Creation of physical file, filing costs
- Creation and updating of online accounts
- Letter creation, email creation etc.
- Advertising costs

Jeez they lay this stuff on thick dont they. Think they forgot to add painting their office and buying the donuts at lunch time

Anyhow thanks for all the help just printed the letter off and will be posting to Home and County in the morning.