Who should I claim mis sold PPI from?

bobhawke

Just found out that I have payment protection insurance. I went through all my paperwork for my mortgage which I took out in August 2002 and found 2 letters from the broker who I went through to get a mortgage with Bank of Scotland
In the first letter the broker confirms the details of the mortgage and under the heading of Recommendations for associated products is the following "I have stated that you will require a suitable protection product, which will be detailed in a separate 'Suitability' letter."
The 'Suitability letter' that I received the following day states "In my letter of 1 August 2002 I dealt with my recommendation and confirmed that I would issue a Suitability letter in respect of the mortgage protection policy required by the lender to run alongside your mortgage". I added the bold emphasis in both cases.

Do I have a case? If so who is it against? the broker who helped pick the mortgage for £300, the Bank of Scotland who I have my mortage with or the insurance company Aviva?

magpiecottage

Neither the lender nor the insurer have any case to answer.

Nothing you have said indicates that you have a case against the broker either. They have identified that the lender required you to have a mortgage protection policy and the document you refer to indicates that there was a separate suitability letter explaining it.

It is also not clear that this was a PPI. In fact what you have said suggests it is more likely to have been a Mortgage Protection Assurance, a form of life policy which pays off the mortgage if you die.

I say this because the terminology used is more consistent with that type of policy and because life cover is more likely to have been a requirement of the loan.

If it is not then you MAY have a case. However, at the time, the Mortgage Code Compliance Board advocated offering PPI to all borrowers or getting them to sign a disclaimer if they refused it - so there would need to a good reason why the adviser should have realised it was not suitable for you.

dunstonh

If the lender required a policy then that is not a mis-sale. If they did not require a policy but you were told it did then it is a mis-sale. Normally that is near impossible to prove but if the suitability report says it is needed then you have a strong case only if it is not required. It is unusual for MPPI to be made a condition of the loan (has been in the past when buying a particular deal - and that is allowed). It is more common for life assurance to be mandatory (which is allowed).

Like magpiecottage says, the name "mortgage protection policy" is a name that is common with decreasing term assurance (life assurance). Are you sure it is MPPI and not Life assurance?

The first bold point doesnt prove anything. If you have a financial need for a policy then the word "require" is frequently used. The second bold point is quite clear.

bobhawke

You're right, it is mortgage life assurance and not payment protection insurance.
I checked the mortgage paperwork and it says that the insurance is recommended but the broker says that it is required. I am paying £17 a month for 25 years for insurance that I neither want nor need. Is there anything I can do about that?

dunstonh

I am paying £17 a month for 25 years for insurance that I neither want nor need.

Are you single/living alone or is the mortgage joint or are you living with anyone or have children?

magpiecottage

bobhawke wrote: »

I checked the mortgage paperwork and it says that the insurance is recommended but the broker says that it is required.

That could mean either the lender requires it or that it is required to meet the recommendation. It does not really prove anything.

If it is an independent broker, as opposed to a tied agent of an insurer, it is also likely to be outside the jurisdiction of the Financial Ombudsman Service.

However, going back to your original post, you have nobody to complain about missold PPI to because nobody sold it to you at all - "mis" or otherwise.

bobhawke

magpiecottage wrote: »

That could mean either the lender requires it or that it is required to meet the recommendation. It does not really prove anything.

If it is an independent broker, as opposed to a tied agent of an insurer, it is also likely to be outside the jurisdiction of the Financial Ombudsman Service.

However, going back to your original post, you have nobody to complain about missold PPI to because nobody sold it to you at all - "mis" or otherwise.

I understand that I don't have payment protection insurance. I do believe that I have been mis sold life assurance though. In this context the recommendation means the bank thinks it is a good idea if I have this insurance whereas the broker told me it was a requirement for the mortgage ie: If I don't take the insurance I won't get the mortgage. Big difference.

One of the paragraphs of the letter said that he doesn't fall under the regulations of the FSA and in small print in the bottom corner it says he is a member of countrywide which is regulated by the FSA.

Dunstonh: Joint mortgage, married, no kids.

dunstonh

Dunstonh: Joint mortgage, married, no kids.

That is going to make any complaint very difficult. With life assurance complaints, where there are financial dependants, you do have a financial need for it. So, you cannot say you didnt need it.

The word "required" is frequently used in financial services when addressing a financial need. Whilst the wording in isolation of your second bold point doesnt look great, your whole file will be viewed and your actual needs position would be looked at. A typo by the adviser in isolation on one document when viewed in conjunction with the factfind and needs analysis showing you did have a need for it means it is unlikely that a complaint would be upheld. If you were single, then it would be an automatic upheld complaint.

I would expect a complaint to be rejected on that basis. It would also take some persuading for the FOS not to have the same view as a married couple not having life assurance on a mortgage is so unusual. A complaint would look like an opportunistic attempt to get a refund due poor wording on one document. If there were other failings, then it may work (a build up of errors). However, if everything else fits then I cant see it.

magpiecottage

bobhawke wrote: »

One of the paragraphs of the letter said that he doesn't fall under the regulations of the FSA

That was the case at the time for mortgages and general insurance.

in small print in the bottom corner it says he is a member of countrywide which is regulated by the FSA.

I assume you mean Countrywide Independent Advisers Limited, which was a network of Independent Financial Advisers taken over by Sesame.

I have successfully argued to FOS that it has no jurisdiction over the sale of term assurance policies (which include mortgage protection assurance) prior to 14 January 2005 apart from a very few exceptions, none of which apply to mortgage protection assurance.

Joint mortgage, married, no kids.

So in the event of your death no children would find themselves in State care but your widow would have to shoulder the burden of the mortgage alone or find herself on the street.

You might not "require" life cover in the sense that it is compulsory, but you do "require" it in the sense that your widow would suffer great financial hardship in the event of your death.

So, if you made a complaint and it landed on my desk I would almost certainly reject it and, if necessary, force it outside of FOS jurisdiction.

bobhawke

magpiecottage wrote: »

That was the case at the time for mortgages and general insurance.



I assume you mean Countrywide Independent Advisers Limited, which was a network of Independent Financial Advisers taken over by Sesame.

I have successfully argued to FOS that it has no jurisdiction over the sale of term assurance policies (which include mortgage protection assurance) prior to 14 January 2005 apart from a very few exceptions, none of which apply to mortgage protection assurance.



So in the event of your death no children would find themselves in State care but your widow would have to shoulder the burden of the mortgage alone or find herself on the street.

You might not "require" life cover in the sense that it is compulsory, but you do "require" it in the sense that your widow would suffer great financial hardship in the event of your death.

So, if you made a complaint and it landed on my desk I would almost certainly reject it and, if necessary, force it outside of FOS jurisdiction.

There wouldn't be any financial hardship if my wife or I died. A 16 year old could afford my mortgage, I live well within my means.

In any case, thank for your the advice.