urgent help needed - non claimed mortgage protection insurance

dulede

I have been told to ask this question of the PPI gurus. All advice appreciated.
__________________________________________________________

Hi


I wonder if anyone out there would have any idea of the situation I am in.

Five years ago my wife and I remortgaged with The Mortgage Group – not sure if were at that time Igroup but we are now under the company that replaced them GE Money.

Since November 2006 I have been on sick due to several mental health issues and have no way of returning to work at present as episodes have required medical and police intervention, I have ongoing psychological / psychiatric treatment. This is all logged with all forms of doctors and my employer etc.

I have since this initially had Statutory Sick Pay and then incapacity benefit, DLA and also have a partial monthly payment via my employers own insurer – which I only knew about after my SSP came to an end. This was never funded by myself but was something done by my employer on a group policy basis.

The main issue is that upon going on the sick my income dropped quite rapidly initially and I ended up in arrears with mortgage and have been under a suspended possession order since May 07 and have only recently finished paying back arrears. During each month we've been in arrears its cost us a £40 admin fee and interest has accumulated on the outstanding arrears balance. We started with arrears of about £1500 but have paid this back and on top of this have incurred over £3000 additional onto our mortgage because of the charges and interest. Those 3 months arrears cost a hefty £5K plus in total.

All that is bad enough but this week have received a letter from Cigna insurance asking if I want to continue my mortgage protection insurance – that covers illness such as mental health issues – that until the letter came I had no idea I had it at all. This was because I haven't been paying anything monthly to it but had apparently paid a single premium on mortgage application for 5 years cover.

My mind is not focused at most times and I had no recollection of the single premium paid. If they hadn't sent this renewal letter I would not be any the wiser. More important things have gone on in my life over past few years than just money issues.

However, seeing as I have paid a one off payment to cover me for illness etc I don't know what I can do to correct things. The premium request for continuation is for over £75 per month to cover what they now quote as under £300 per month mortgage protection. This seems very high for such a low sum assured. It seems that I paid a heck of a high one off payment which is now looking so doubtful to be of any value to me.

I am worried they are going to try and pull wool completely over my newly opened eyes. As said I have gone through a mortgage hearing to save my home. Legal aid assisted us in trying to keep our house at time of arrears so if I had known about this believe me we'd have claimed then. The Cigna advisor I spoke to on their continuation of cover helpline said its not uncommon for people to call up not knowing they were covered upon a receipt of a continuation of cover option letter. She said couldn't say how I'd stand with it being over 2 years since I went on sick.

However, the forms she has sent me are indicating that they want me to carry on paying monthly premium and then start receiving payments from now which I consider a complete disregard for my condition over the past 2 years or so. The premium had covered me during all of this time and only comes up for renewal at end of October. I don't want to lose out but think this is the way it is going.

Its unlikely, but I could be back in work in 3 months time but have lost out on all too valuable cover over the past 2 years, and they would get away with paying anything substantial out to me for my original premium which I paid, obviously in good faith, at the time. My condition can make things from yesterday totally forgettable and the other way around. My illness has been no fairy tale for my family or I and big companies coming away scot free really grates me as they always have ways of avoiding payouts. My fault I know but it makes me feel so mad

I don't know how I stand but my illness is debiltating enough that I haven't got the ability or willpower to fight a non winnable case. But I feel as if these single one off premiums are very effective money makers for companies as so much can go on over five years and at times of extreme stress I now know how easy it is to completely forget you've paid for them. This could have cost me an upfront fee of somewhere in the region of £4500 and I am pretty upset with the situation, very angry with myself and just want some idea of where I might go from here.

Please accept apologies for such a long posting but I simply want to put as much of my situation across. My stress is well up on all this and have had arguments with my wife over my not being aware of what cover I had. Even if I get a full payment off Cigna to cover what I could have been claiming over past 2 years I don't know how this is going to affect all other payments from my employers group insurance and incapacity benefit. Would I then be fending off issues regarding taking more money from these than I was entitled to.

Two days ago I was just getting on with things but now I've got so much going through my mind. If I am not entitled I can live with that but I hate the idea of large companies benefiting from someone's money and then also with no requrement on them to pay out. Money causes Hell when you haven't got it and twice as much when there's a slight possibility of receiving money you hadn't bargained on.What a quagmire.

Thank you all for your viewing and any advice you can offer.

dulede

di3004

Hi there

This is one that Dunstonh should be able to help you with, being a financial adviser, I'm sure Dunstonh will give you the best advice on this actual matter, and should be along at some point soon.

Good luck with this.;)

PaulinWeston

Hi Dulede

Your post isn't too long at all! It's very clear and consise (much better than I ever manage).

It sounds like you've been through some real challenges - and I'm sure there's loads of people who use this forum who can empathise... to get a dish load of letters now - and have to work out what to do ... sounds a real 'mare to me!!

The first thing I'd say is "don't dispair!" .. I'm not an expert - but there has been alot of articles in the press recently about "single payment policies" (which is what it sounds like you have...) and how companies have unlawfully manipulated customers.

Without knowing much more about your policy, "my" advice would be to speak to someone who can give you difinitive legal advice. In my experience, that usually means speaking to a solicitor.

There are lots of solicitors who can help you, who won't charge you... You could call your local community psychiatric team and ask them if they know of any in your area.. Or someone in your local library might be able to point you in the right direction.. Or, you could call (or drop in) to a local solicitor and ask if they have someone who could help you (explain your circumstances - say you're on benefit etc.) - or if they could point you in the direction of another firm who could... Or you could ask your local Citizens' Advice Bureau if they could tell you what local solicitors could help...

I would think that there's bound to be someone in your area who's up to speed with the current PPI issues - and they may "relish" the thought of helping you take on the big corporate organisation!!

As Di said... Good luck... (and keep us posted!!) ...

All the best matey

Paul

dulede

Paul - I am trying to talk to advisor at community legal advice. I have gotten used to dealing with debt and companies but this is a minefield of potential issues...yet I hate the idea of a company taking what I estimate must have been a few grand for single instalment and then just using manipulation of their rules to pay very little of what should have been due. Unfortunately, as I only had the letter for continuing cover this week and renewal in October so time is on their side - unless I can force this to point of refund at least of past two years worth of premium - which would be much better than nothing. Ombudsman is always an option at end of day as well. Will be looking at getting legal advice and help in this matter so you never know.

Di - I have posted on PPI forum as well and while on here am hoping to hear from dunstonh

Many thanks to both of you.
dulede

di3004

dulede wrote: »

Paul - I am trying to talk to advisor at community legal advice. I have gotten used to dealing with debt and companies but this is a minefield of potential issues...yet I hate the idea of a company taking what I estimate must have been a few grand for single instalment and then just using manipulation of their rules to pay very little of what should have been due. Unfortunately, as I only had the letter for continuing cover this week and renewal in October so time is on their side - unless I can force this to point of refund at least of past two years worth of premium - which would be much better than nothing. Ombudsman is always an option at end of day as well. Will be looking at getting legal advice and help in this matter so you never know.

Di - I have posted on PPI forum as well and while on here am hoping to hear from dunstonh

Many thanks to both of you.
dulede

Bumping this one for you.;)

Your welcome and hopefully Dunstonh will post up soon.

Been searching for your other post dulede.

Di

dulede

Sorry Di,

I got confused on placing of thread. this is the updated one as Kelbob pointed me to place on here. As it happens though I have another thread on here which is getting views but no replies. If you can take a look and advise me if I'd be better off on different forum / thread.

here is the heading as can't post link as a newbie
Admitted amounts on CCJ claim but now seems amounts wrong

its in debt free wannabe forum
much appreciated, dulede

di3004

Not a problem, bumped it up for you on the other thread and also sent another post in regards of a SAR request, if you not done this yet.;)

dunstonh

Away at the weekend so didnt see it until now.

There are a few issues here. Firstly, the cover was mis-sold. Over 90% of single premium PPI/MPPI plans are considered mis-sold. It was added to your mortage, you were paying interest on it and your monthly payment was higher because of that. Had it been monthly in the first place then the monthly payment would have been lower than the cost of single payment spread monthly.

You can claim mis-sale on that basis. You dont need any legal help as these is no justification for doing it the way it was done. These have to be the easiest cases to get upheld.

You may have been able to claim on the policy. Most MPPI plans pay out for 12 months. So, you may wish to weigh up the benefit of putting in a claim a now to get 12 months of payments. You will need to explain why you didnt claim earlier but its worth looking at.

Problem is that you are going to have to weigh up the benefit of a full refund (plus interest) against 12 months of payout with no refund on the MPPI single premium apart from the cost difference between monthly and single (plus interest).

dulede

Hi Dunstonh

Many thanks for your input.

I spoke earlier to financial ombudsman who explained he could start things from point of view of being mis-sold.

I have felt terrible about this all day as every time we have had a financial advisor - never IFA though - at our home they have always seemed to be doing the best they can for us. I know I must have signed for this which made me feel even worse.

My argurment, prior to your post, would have been to claim on the policy retrospectively, with the major point of contention being that it is so easy for someone to forget that such a policy is in place. At times of illness and other forms of upheaval, such as I've experienced over the past few years such an oversight could be seen as almost guaranteed, other than for the most organised individuals - which I unfortunately am not.

I also can't understand, according to Financial Ombudsman, how it is apparently normal for mortgage companies to know you have mortgage protection, yet even when putting you to the sword with court action have no legal responsibility to point out you are covered. ( I have yet to confirm this with my current mortgage company}. If we hadn't been able to struggle through in 2007 and make additional payments on top of mortgage to fulfil suspended possession order we would have lost home. This even when a perfectly adequate policy was in place and certainly could have made all the difference.

Such policies, I believe, could well turn out to be the new bank charges refunds in future.

There are so many issues with these single premium policies that seem to indicate they are less than ideal for most people, though strategically great for financial institutions:

including how do these companies get away with a single premium set up when a client may suffer a condition which makes it impossible for them to do anything about a policy they have no recollection of. I didn't right up until the letter arrived last week. If I'd been paying monthly then there'd have been a ready refresher for me on each and every bank statement.

I've been told also these are always front loaded products, which are always great for companies but as you say incur interest from day one - which I definitely can't remember being told although can't guarantee this as my mind is not too clever nowadays. They just don't really benefit the client and certainly haven't thus far helped me in any way and I wonder how many others are out there in the midst of depression or worse, struggling but oblivious to such a policy's existence.

I just think such policies are scandalous and while I would never like the idea of accusing someone who seemed completely genuine of mis-selling, it does appear that the policy was chosen with no real benefit in mind for myself but simply to ensure the advisor, his company and the insurance company of a payment which unlike monthly based I couldn't stop at a later date should I have chosen to.

We were already going through the mill and had been in a poor financial situation for some years. Due to this we were already only suitable for sub prime lender. Therefore I do feel that I should fight my way through this as I know full well that this form of policy was not the only type available five years ago. I can only assume it was the type, either implied to the advisor to use or in worst case actually directed to use with no discretion on his part, by either the Financial Advice company he worked for or the mortgage company itself. I have no idea why it was chosen only that for whatever reason it was and it has failed us in several respects.

To be honest I am livid. Its cost me an estimated £4500 initially plus what you put forward to me as additional interest from day one. On top of this we went through court and have been subject to paying back extra money each month to fulfil suspended possession order but each month had £40 admin charge added which then accumulated interest so that additional charges due to falling into arrears have added about £3500 to our mortgage and this will now accrue interest on top of initial mortgage principal and will finally get paid off in 15 years time. What a right mess.

All of this hardship has come down on us over past two and a half years simply because I had a plan I could not recollect until they send me a renewal notice. Monthly plan would have been so much more effective in such circumstances.

I think I've got a lot of work to do, can't lay my hands on documentation, but have to assume there is a paper trail going back through the companies for five years. At the very least I now have the mortgage protection policy number to use in my search. FO has advised me to trace back what company the mortgage was done with 5 years ago, several changes since then, and then to go through updating the financial ombudsman.on this

That is, unless there is a standard and more direct way for me to approach this.

You have tipped my mind with the way you portray this type of policy and how it was mis-sold. I don't feel I need to feel bad in any way for trying to achieve some resolution on this matter as the financial advisor could have told me, and sold me, from other options that were available at that time and for years before.

Any and all advice is appreciated. If you feel I am going about things the wrong way please let me know as I don't want to shoot myself in the foot over this.

I apologise for long reply. I am extremely grateful but am also extremely angry over this now. You are a star. Until your response I had felt there was little could be done but now I just hope we have a case. Am I right in my next step via financial ombudsman or is there a specific process to follow on this. If it wasn't for the internet much of what I have found out from yourself would have been difficult to uncover as consumer direct simply told me to get hold of T&Cs through Cigna. Its a minefield but with help and advice from people like yourselves the internet can be a great thing.

Happier now and very grateful,
dulede