Yet another was PPI missold question

chartreuse_2

Hi all, after an opinion, so I'll be brief.

Took out a 7 year bank loan under a year ago, but told the lady at the time that I wouldn't need it for that long as I was selling my house and would settle it then. She bundled single payment PPI anyway, muggins here didn't know that this was a bad idea and accepted it.

Anyway I've since cancelled the PPI and got a refund on the outstanding part, but not what I've paid and I'm now ready to clear the loan.

Would I have an argument that, as I was intending to clear the loan well before the 7 years, single payment PPI was wholly inappropriate? It would make a huge difference to my settlement figure.

Thanks for any opinions.

Astaroth

As purely a personal opinion....

I think it is a weak argument as if you became perminataly unable to work or died then the cover would have still applied for the full term of the loan.

Likewise if your intentions of paying off early hadnt occurred then you would still have been paying it off over the 7 years and would have been covered for it.

defender_of_the_weak

If you told her you were intending to pay off early there was no reason to put it in in the first place without a full discussion of the financial consequences if you managed to acheive your aim.

chartreuse_2

Astaroth wrote:

As purely a personal opinion....

I think it is a weak argument as if you became perminataly unable to work or died then the cover would have still applied for the full term of the loan.

Likewise if your intentions of paying off early hadnt occurred then you would still have been paying it off over the 7 years and would have been covered for it.

With respect, Astaroth, I'm not sure that you've grasped my point.

It's not a question as to whether it might have been wise to have some form of insurance. Rather it's a matter of whether, given my clearly expressed intent, the bank employee was right to push single payment insurance, when multiple payment insurance would have been better for me.

Also, I have loads of life and sickness cover already, but was never asked about that.

Thanks, though. Answering your point has helped me refine my argument

Astaroth

You have to remember that bank representatives are not authorised by the FSA to give insurance advice. As such they can only tell you about one or more products that they have available and it is up to the customer to decide which is most appropriate for them.

As such they would have been acting illegally if they had said that product X was more suitable than product Y or that neither was necessary due to your other arrangements.

Rafter

Astaroth is right - this wasn't an 'advised sale' and it is up to you to read the small print.....

.... however.....

I believe there are grounds to challenge the refund policy on single premium PPI and if you calculated it on a fair(ish) basis using rule of 78 (which means the premiums are higher at the start of the loan than they are at the end) and then claimed for the difference between this and what you have been offered then that wouldn't be unfair in my view.

You have to remember the mindset of the banks though.

Because they sell you someone elses insurance usually, they take big fat commissions, often 80% of the premiums, up front.

So by asking for a refund they have to book it as a loss in this years numbers and will under pressure not to do so.

So commercial greed is driving their decision making rather than what might be considered fair by the FSA or the average customer.

Good luck with your claim though and hope you get some redress.

R.

regularsaver1

Some banks are authorised to give an advised level of service - ie Halifax face to face (with call centre it is non-advised), but they can only talk about their products and can not compare

They will make a recommendation once they have collected details of existing provisions and they feel there is a need. Alternatively they will record that there was a request to not discuss insurance - and then it will be up to you to look elsewhere for ppi

The staff are regulary observed and contacts are made with customers

http://www.fsa.gov.uk/pubs/other/factsheet_sales.pdf

you should not receive a full recommendation if the service level is non-advised