MSE News: A confession: I've mis-sold PPI

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  • Farmiloe1980
    Farmiloe1980 Posts: 37 Forumite
    edited 12 May 2011 at 2:47PM
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    dunstonh wrote: »
    Thanks for providing the extra detail. It has made a difference. It really does look like mis-sale situation now.

    Thanks for your advice.
    In your view is the mis-selling based on the tax free part of it then or another part that you have explained?

    so endowment assurance is not the same as savings plan either?
  • dunstonh
    dunstonh Posts: 116,648 Forumite
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    edited 12 May 2011 at 3:54PM
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    In your view is the mis-selling based on the tax free part of it then or another part that you have explained?

    The key things I see are:

    1 - It was presented as a friendly society tax free plan but in reality it was an endowment policy (where it is taxed at corporate level)
    2 - ISA was not recommended (they may not have an ISA but it trumps endowments every time)
    3 - unit trusts were not recommended (again, they may not offer these but they trump endowments)

    Bottom line, You were told about tax efficiency and tax free but it is nothing of the sort and you were sold an inferior product.

    Advice is based on tax efficiency, cost and risk profile. Tied agents dont have to worry about costs like an IFA would have to. However, they do have to be concerned with tax efficiency and this guy has used the option that is last in the queue. So, he should have eliminated all the other options which are equally or potentially better (such as the friendly society savings plan and ISAs).
    owment assurance is not the same as savings plan either?

    You can get savings endowments. They used to be the staple product for generations from the home sales forces. However, most stopped offering them around 1998. Anything later than that where an endowment was used is generally considered bad advice unless proven otherwise.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • magpiecottage
    magpiecottage Posts: 9,241 Forumite
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    Looking at this, it seems to be what is known as "industrial branch" business - the weekly payments point to this.

    That being so, the option of an ISA is probably unlikely (and the policy may well predate ISAs). The standards required for this type of sale were less vigorous than for other investments.
  • Farmiloe1980
    Farmiloe1980 Posts: 37 Forumite
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    Yes thats right they don't do ISA's, i also took this out in 2003
  • Devils_Avocado
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    I worked for Sharps bedrooms for several years. If we sold PPI we got an extra 2% commission, about £80 extra on a deal. I refused to sell it. If the customer settled up early, they didn't get the PPI part refunded. We were told that they could claim on the PPI for the time that the loan would have run and that such payments would be paid direct to the customer. Incredible.
  • Farmiloe1980
    Farmiloe1980 Posts: 37 Forumite
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    Sorry one more thing about my case

    Because they were investigated by HMRC 3years ago into the tax issue, they have agreed to pay all tax liabilites.
    So does that mean they haven't mis-sold with that basis or because they originally mis-sold it as tax free that is what applies.

    Because part of this was the small loan scheme which people who have taxable polices can no longer use because of the taxable situation.
    And again this was used in the selling part of the policy " you can have a small loan at a great rate" but i can't because of there !!!! up?
  • Farmiloe1980
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    anyone know the answer please?
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