Mortgage Protection Ins- Can you claim back if mis-sold?

bob_dob

Hi,
A friend today told me that he has always paid Mortgage protection insurance, he wanted to know if he could claim it back as he was given the impression that he had to take it out.
I have never really heard of this, only the usual loan PPI so i haven't a clue.

Please could someone advise?

magpiecottage

That would depend on a number of factors, in particular:

When did he take it out?
Who sold it to him?
What did it protect him against (eg death, unemployment, ill health etc)?
Did he pay monthly premiums or a single premium that was added to the loan?
Was he actually told he had to have it and does he have evidence to support that?

bob_dob

Apoligies, i should have phrased it as 'Have people had any luck in reclaiming mis-sold mortgage PPI?'.

Anyone?

hedge_hog

I sent the claim form for PPI to Santander (as they took over Alliance-Leicester) for mortgage PPI, as my wife already had protection from her employment at the time of taking it out. After a very long time, I received a letter stating that they could not find our account number nor any record of our names on their database! I have since sent another letter to them with copies of the original policy document as well as copies of letters from them that they sent when premiums changed. I am awaiting a reply.

I don't see that there is any difference between mis-selling of this type of PPI and any other, so am determined to press my claim as far and for as long as it takes to get 10 years of premiums back.

dunstonh

Apoligies, i should have phrased it as 'Have people had any luck in reclaiming mis-sold mortgage PPI?'.

Anyone?

Yes there has been some success but the rate is much lower than loan and credit card. Mainly as most were put in place under an advice process and have a better audit trail and MPPI is considered about the only PPI that is worth having. Even the DWP set benefits on the basis of assumption that the person has MPPI.

loan/credit card PPI refunds tend to be made because of lack of documentation.

I don't see that there is any difference between mis-selling of this type of PPI and any other, so am determined to press my claim as far and for as long as it takes to get 10 years of premiums back.

There is. The FSA recognised it their report and the complaint stats recognise it is well with a much lower uphold rate. With MPPI it is very easy to see where a complaint would be upheld or rejected.

he wanted to know if he could claim it back as he was given the impression that he had to take it out.

Very few complaints get upheld for that reason as it is an unprovable verbal accusation. It would need another failure for a complaint to be upheld.

magpiecottage

hedge_hog wrote: »

I don't see that there is any difference between mis-selling of this type of PPI and any other, so am determined to press my claim as far and for as long as it takes to get 10 years of premiums back.

If it is missold, the redress is the same but there are differences with MPPI which mean a missale is less likely.

In particular, although you think your wife had "cover" through work, do you actually know what it was?

We have seen people post that they did not need cover because they were entitled to Statutory Sick Pay - which is simply a modest State benefit, payable for up to six months. The employer pays it but then claims almost all of it back from the State.

Even if that is not the case, if the adviser asked about it and was given the wrong answer, that would not be their fault.

Then you have the question of whether Santander actually sold it to you and not an independent mortgage adviser.

Finally, if it is your wife's policy then she is entitled to complain but you are not.

You are a long way from showing that Santander owe you redress.

bob_dob

Thank you all.
There are some good answers there.

So what sort of reasons would/could/have been acceptable as a case of mis-selling?

dunstonh

So what sort of reasons would/could/have been acceptable as a case of mis-selling?

There are three key areas where MPPI is wrong.

1 - single premium. It should be paid monthly. Not paid as a single amount
2 - not eligible for cover - i.e. illnesses prevent the policy offering cover in enough areas to make it useless (minor illnesses would not be enough)
3 - no financial need - if you have sickness pay that has significant overlap (i.e. payable for 12 months) and takes you over the maximum level of cover allowed (typically around 66-75% of your gross pay) then you have no financial need for the policy. If you are only paid for say 30-90 days, then that would not be sufficient overlap.

A 4th would be Halifax. They are auto upholding all complaints whether you have grounds or not. Santander are not auto upholding (assuming you used Santander and not a broker/adviser).

To give you an indication of how small the issue is with MPPI, the UK's largest IFA/mortgage adviser network (with around 9000 advisers) had just 16 PPI complaints with the FOS in the last monitoring period. Advised cases are very easy for them to defend unless their is a failing in one of three things above.

hedge_hog

I should have said that I filled in the claim on behalf of my wife, as the policy was in her name only. In any event, this morning we received an offer to the value of approximately £3,600 as a refund of premiums paid over the ten years (1999-2009), plus an interest payment of around £2,200 calculated at a simple interest rate of 8%. The time between my second letter to them and today was 3 weeks.

As far as evidence is concerned, I only sent them a copy of the original policy document and copies of 3 letters from A&L which were sent to us when changes to premiums were made - that was all. On the application form I merely stated that the policy was sold to my wife during a meeting at A&L offices at the time of taking out the mortgage, without any enquiries from the A&L advisor into my wife's employment circumstances and her redundancy/sickness protection. My wife was a long-term employee of the NHS and would have been entitled to 6 months on full pay, if off sick, and generous redundancy payments. There was no written record of the interview, so my assertion that no proper advice was given was merely a statement by me, although I knew the name of the advisor and the precise date of the meeting. Santander could presumably have rejected this claim, but chose not to - does this mean that they are now "auto-upholding" complaints as well?

dunstonh

My wife was a long-term employee of the NHS and would have been entitled to 6 months on full pay, if off sick, and generous redundancy payments.

There was no written record of the interview, so my assertion that no proper advice was given was merely a statement by me

If it was done under a sales process than there wouldnt be. If it was done under an advice process then there should be.

Santander could presumably have rejected this claim, but chose not to - does this mean that they are now "auto-upholding" complaints as well?

The 6 months full pay, 6 months half would have been the upheld reason. Redundancy wouldnt have been. There only needs to be one reason.

The banks are frustrating as they have gone from one extreme to the other. They have always been a bit scattergun in how they deal with complaints. Rejecting ones they shouldnt and upholding ones they shouldnt. We are still seeing Santander rejections so, unlike Halifax, we cant say they are auto upholding at this time.