Mortgage PPI

wildref

I posted this on the PPI board, but someone guided me here to get some advice. I've adjusted the original post a little.

---

I got advice for a first mortgage from a financial advisor, who recommended a mortgage with Northern Rock and PPI with Scottish Equitable.
I seem to remember the advisor implying that I 'should always have PPI' with the mortgage and, indeed, when I found the original paperwork form the advisor, it says on it - "as this is a new loan, you require a suitable vehicle in order that the mortgage is repaid upon your death or if you were to suffer critical illness..."

It turns out that the PPI didn't actually even cover me for 5 of the years I had it, and had nothing in the T&Cs to tell me this either. It was only in converstaion with an advisor from Scott Equitable when cancelling earlier this year, that I found out I wasn't actually covered.

Should I go for a PPI mis-sell and, if so, who is the mis-sell against and when?
Is the mis-sell against the advisor, or is it against Scottish Equitable who, in their T&C didn't indicate that I wouldn't be covered?
And is the mis-sell from the beginning of the PPI or from when I wasn't covered?

Any help would be appreciated! Thanks.

poacherp

Sounds as if there is some confusion here - you appear to be referring to 2 forms of cover.

PPI - Payment Protection Insurance is a plan that is designed to meet the monthly mortgage repayments in the event of sickness, accident, disability and/or unemployment. The benefit kicks in after a deferred period of 1 month for example and will pay out for the duration of the illness/unemployment - a maximum period of 12-24 months is the norm.

Mortgage Protection - this pays a lump sum in the event of death or earlier diagnosis of a specified critical illness. The sum assured is normally the amount of mortgage borrowed and the policy is normally over the term of the mortgage. In the event of a valid claim, a lump sum will be paid that should repay the mortgage - not the monthly payments.

Sounds like you may have Mortgage Protection with Scot Eq. You haven't provided enough info to confirm this or to determine whether or not you actually do have PPI.

TrickyDicky101

My view is that you had advice that seems to have been bad so you pursue the giver of that advice ie your adviser. The product is not necessarily bad so I don't see why you would have a claim against the provider. This is only my opinion, however.

wildref

poacherp wrote: »

Sounds as if there is some confusion here - you appear to be referring to 2 forms of cover.

PPI - Payment Protection Insurance is a plan that is designed to meet the monthly mortgage repayments in the event of sickness, accident, disability and/or unemployment. The benefit kicks in after a deferred period of 1 month for example and will pay out for the duration of the illness/unemployment - a maximum period of 12-24 months is the norm.

Mortgage Protection - this pays a lump sum in the event of death or earlier diagnosis of a specified critical illness. The sum assured is normally the amount of mortgage borrowed and the policy is normally over the term of the mortgage. In the event of a valid claim, a lump sum will be paid that should repay the mortgage - not the monthly payments.

Sounds like you may have Mortgage Protection with Scot Eq. You haven't provided enough info to confirm this or to determine whether or not younactually domhave PPI.

...ahh, my mistake on that part. I've gone back to the documentation and it is as you say, advising portgage protection.

Looking further at it, it is the mortgage with Northern Rock that had the PPI included with it, free for the first 6 months (how nice!) This came as standard, and it was up to me I suppose to cancel after 6 months if I didn't want it.
There was certainly no selling of the PPI on this part of the mortgage, and no going through the details of it - it just came as part of the deal.
I have my confirmatiom letter for this PPI which simply says 'your first 6 months are free...please read the enclosed [policy document]...it is important that you understand the T&Cs...Your cover has been arranged by Northern Rock and is underwritten by L&G. All your enquiries and claims will be dealt with by L&G"

Firstly, I don't feel I was given a choice with the PPI, although I suppose I could have cancelled it.
Secondly, the T&Cs state, 'This policy only applies if...You have a mortgage in respect of your main residence...'
Because of my employment, I am entitled to rent out this property and still legally hold it as my main residence, which I have done for the last 5 years (I'm not an MP tho!). However, it turned out that I wouldn't have been able to claim on my PPI given that it was rented - but nothing appears in the T&Cs to say this, not even 'living at the property', just 'mortgage on main residence'. I have therefore been paying for 5 years without realising that I wasn't covered.

It seems, therefore, that my claim (if I have one) is with Northern Rock I suppose?

poacherp

Hard for me to say who is responsible for the sale - would be the adviser or the N Rock. The fact that the 1st 6 months were free does not negate any responsibility.

dunstonh

I got advice for a first mortgage from a financial advisor, who recommended a mortgage with Northern Rock and PPI with Scottish Equitable.

As already mentioned, that is not PPI.

Looking further at it, it is the mortgage with Northern Rock that had the PPI included with it, free for the first 6 months (how nice!) This came as standard, and it was up to me I suppose to cancel after 6 months if I didn't want it.

Which is all very acceptable.

There was certainly no selling of the PPI on this part of the mortgage, and no going through the details of it - it just came as part of the deal.

That would make sense. A financial adviser would not use Northern rock insurance products typically.

Firstly, I don't feel I was given a choice with the PPI, although I suppose I could have cancelled it.

You were given the choice to have it for free and then either keep it or cancel it after the free period. Easy choice there.

It seems, therefore, that my claim (if I have one) is with Northern Rock I suppose?

It doesnt sound like a mis-sale. It sounds like you forgot or chose not to at the time. However, you now have a get out of jail free card to use as you were not covered. So, you dont complain it was mis-sold. You complain that you ceased to be eligible for cover from the date the property ceased to be your primary residence and that premiums should be returned from that point onwards.

The letter goes to Northern Rock.

kingstreet

Because of my employment, I am entitled to rent out this property and still legally hold it as my main residence, which I have done for the last 5 years

When you asked Northern Rock for consent to let, did they inform you at that time that the Accident, Sickness & Unemployment cover would become redundant from that point?

wildref

kingstreet wrote: »

When you asked Northern Rock for consent to let, did they inform you at that time that the Accident, Sickness & Unemployment cover would become redundant from that point?

That's an interesting point. We had remortagaged by then with a different company.
Naturally they didn't mention it (just gave us an extra 0.5%) to pay.

My issue is with the T&Cs of the PPI which don't say about having to inform L&G when we rent or don't live at the property for x amount of days (which seems to be in most policies these days). Therefore we didn't inform them about renting, because we didn't need to.

kingstreet

As dunston said,

You complain that you ceased to be eligible for cover from the date the property ceased to be your primary residence and that premiums should be returned from that point onwards.

However, as you had by then repaid the Northern Rock mortgage and the cover was provided by L&G, I'm not sure if they should be your first port of call.

dunstonh

My issue is with the T&Cs of the PPI which don't say about having to inform L&G when we rent or don't live at the property for x amount of days (which seems to be in most policies these days). Therefore we didn't inform them about renting, because we didn't need to.

And are you sure that the MPPI restricts you in this way?

giving the new information, you cant see Northern Rock or the original adviser having any liability. Just L&G on the assumption that they would not have paid out as the OP was ineligible (which may be the case on MPPI but not PPI where it would be eligible).

wildref

I think, on the balance of replies, my next action is going to be a letter going to L&G and taking it from there once they response.

I think the issue is that their policy would not have paid out in the last 5 years, and their T&Cs don't say anything about me being aware that I should have contacted them about a change in these circumstances.
It was they who sent the original letter of confirmation and T&Cs for me to be happy with the product.

I'll update you with their response when I get it!

Thanks for all the help people