Mortgage PPI - Was I Mis-sold?

LoidPhil

In July 2004, on the back of an additional mortgage advance to allow us to move house, my wife and I were 'sold' a joint Mortgage PPI policy by Nationwide (our mortgage provider) through their approved insurer Aviva Insurance Limited. For a monthly cover of £850 (split 50/50 between my wife and I, so effectively £425 each) I have been charged the princely sum of £50.06 per month from inception.

I consider myself to be quite money savvy, constantly switching cards/loans/insurance to get the best deals on offer, but I must admit that for the past 5 years I've been of the understanding that this particular policy was a compulsory requirement of my mortgage advance and that I had to have it with Nationwide's preferred insurer.

I received notice from Nationwide 2 days ago that, wef 1/8/09, the premium would increase to £66.22 per month. This prompted be to do some investigative work, and now I've looked into it not only do I find that such policies are not compulsory, but that I could've had an equivalent deal with another provider at a fraction of the cost I've been paying (I've just been quoted £17.34 per month from i protect insurance).

On top of this I'm not at all sure that I actually needed protection in the first place. I know that hindsight is a wonderful thing, but both myself and my wife were (and still are) fit young people with secure jobs (well as secure as any job!); myself in the private sector and my wife as a nurse. We both have good long term sick coverage through our employers, as well as decent redundancy packages should the worst come to the worst.

Does anyone have any advice on whether they think I have good grounds for claiming that we were mis-sold the policy, and if so do Martin's guidelines around PPI mis-selling apply to MPPI? I would be doing so on the grounds of i) I purchased the policy on the understanding that it was compulsory, ii) the only option presented to me was through Nationwide's preferred provider (i.e. I was not informed about alternative, cheaper, cover from other insurers), iii) the policy was unnecessary given our personal circumstances.

marshallka

Yes, I think you have every reason to go for this misselling. If it was sold as compulsory and you had no choice or they did not offer you to buy it elsewhere etc then it sounds like it was missold. If you take a look through the reclaim section of PPI on Martins guide there are templates but its always better to make up your own letter if possible for this. You then send it to the ones that actually sold the policy and give them 8 weeks for a full and final response. Always post it recorded delivery too so you have a proof.

LoidPhil

Thanks for your replies guys. I'll get an initial letter drafted tonight. I've paid £50.06 per month from 1/8/04 to date, so that's almost £3,000 in total.

dunstonh

The only problem here is that it will be your word against theirs. Although, if a mortgage adviser was involved (rather than just a clerk handling the mortgage application) they should have recorded your financial needs and documented this.

the only option presented to me was through Nationwide's preferred provider (i.e. I was not informed about alternative, cheaper, cover from other insurers),

That is the only option they are authorised to offer. They are tied agents and dont need to inform you of alternatives.

iii) the policy was unnecessary given our personal circumstances.

If that is the case then you do have some grounds. However, you dont say anything in your post that suggests this is the case. Indeed, you say you have been shopping around and you wouldnt do that if it wasnt needed.

but both myself and my wife were (and still are) fit young people with secure jobs (well as secure as any job!); myself in the private sector and my wife as a nurse. We both have good long term sick coverage through our employers, as well as decent redundancy packages should the worst come to the worst.

None of that is grounds for not having MPPI. A nurse will be on between 3 months full pay to 6 months full pay (then 3/6 months half pay then nothing). It certainly does mean that PHI would be a better option than MPPI but most mortgage tied agents are not authorised to sell PHI or dont have a PHI policy available to them and therefore dont have to offer it. MPPI, unlike PPI, is paid to the lender and would be paid even if work income continued.

There is nothing at all wrong with MPPI as a product when its paid on a monthly basis from your current account. So, most of the reasons given for potential mis-sales on PPI wont apply to MPPI.

So, I'm not saying you dont have grounds but make sure you dont go off like a scattergun and start giving reasons that are actually reasons to have it. Not reasons why you shouldnt. If it ends up being your word against theirs and a balance of probability decision needs to be made, then credibility comes into play and if you list things that are easily shown to be false then that will work against you.