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can i claim PPI from paymentshield?

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  • m9yty
    m9yty Posts: 5 Forumite
    Your complaint is very weak and seems somewhat unnecessary.

    You did need the insurances. With your low sickness benefits from work a bad leg break could see you lose your house, that demonstrates a need.

    What if you died, could your partner manage the repayments? Or would she then be faced with a double whammy of a dead partner and homelessness.

    If I were you rather than making a complaint I'd start paying for my life insurance again!

    It was while sorting my new life insurance policy out that i discovered paymentshield was ppi not life insurance as i thought it was (the only reason why i was still paying it)

    I see i dont have much chance getting anywhere but it seems all you IFA's are missing the point i was trying to put across.

    Whether i should have mppi or not i specifically asked for nothing unless it directly affected my chances of getting the mortgage.

    He would have been right in telling me i should have mppi or even i "need" mppi.. but he didnt. He told us if we could not get the mortgage without both mppi from payment shield and life insurance.

    That was a blatant lie + not correct advice.. we went to him to get advice + he took advantage of the fact we didnt know anything about mortages.

    Whether i claim it back or not. I have paid over £1500 to a company i didnt want to pay a penny to.. based on the incorrect advice of a mortgage advisor who clearly just wanted a cut from selling us something i specifically told him we didnt want.
  • -taff
    -taff Posts: 15,370 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    It's not a blatant lie at all.
    You will die, so will your partner, therefore you absolutely do need life insurance.

    As far as the paymentshield goes, what exactly does it cover? Bear in mind that if you haven't cancelled it already, it will be cancelled once you complain about it, so if you do need cover for unemplyment or income protection, you'd better set up an alternative. 3 months sick pay is nothing if you were to contract something serious.
    It might well have been a condition of the mortgage. I expect when you make your complaint, you'll find out.
    Non me fac calcitrare tuum culi
  • m9yty
    m9yty Posts: 5 Forumite
    -taff wrote: »
    It's not a blatant lie at all..

    Yes it is.

    We asked the direct question "can we get a mortgage without mppi"

    The correct answer would have been yes.

    The answer we were given was no.

    Black + white.



    My work gives me 6 months full pay (not the 3 months i said before)

    But after that i still get paid.. just not my full wage.

    My partner works self imployed so i would still have a wage.

    But neither of those points matter ^^ as thats not my complaint.
  • magpiecottage
    magpiecottage Posts: 9,241 Forumite
    1,000 Posts Combo Breaker
    edited 24 February 2013 at 4:19PM
    m9yty wrote: »
    I realise u are a financial advisor + are looking at it from that point of view.

    Okay - I'm not.
    At the time i said all i wanted was the bare minimum requirements to get the Leeds Building Society Mortgage.
    Okay
    He should have advised me that i SHOULD get PPI incase anything happened but i didnt NEED it to get the mortgage we wanted. He didnt. Instead he insisted the me + my partner HAD to get ppi + life insurance to get the mortgage which was a lie + missleading.
    He might have lied to you.

    On the other hand he might not and you might be lying to me.

    Or you might have misremembered.

    Or, and this is the most common in my experience, he said you HAD to have cover in the sense that, although not compulsory, it was essential because the consequences of not being able to meet the repayments on your mortgage would be so dire.
    I even explaned clearly to him at the time that i have had loans before + NEVER got ppi as i thought it was a scam. He then said that mortgages were "different" and i NEEDED ppi
    They are different because of the warning "Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it".

    The fact is that five years ago, if you had failed to make repayments because you lost your income, the State would have provided no help for nine months. By that time your lender would have started possession proceedings against you.

    Because of this, the old Mortgage Code Compliance Board actually advocated advisers getting a disclaimer signed by advisers who refused cover.
    or we would be rejected.
    The problem with that argument is that by the time you took out your mortgage, the initial "Key Facts" document and the mortgage offer would both have specified what, if any, insurance was required for you to take out the mortgage. It would be quite clear and if it is not on it, then it was not compulsory.

    So if the case came to me, I would simply look at the mortgage offer, see it was not listed and conclude that you were aware that it was not - or at least you would have been if, as you ought, you had read your mortgage offer before signing it.
    You i say i FINANCIALLY NEEDED PPI but if u think about it i dont NEED a house so if the worste comes to it then id loose my house. Not the end of the world.

    Maybe - but it's pretty cold outside today!
    I also get sick pay from my work. Full for 3 months then mandatory from then on.
    Five years ago, Statutory sick pay was £72.55 per week. Any sick pay from your employer includes it.

    So you would have received full pay for three months then £72.55 per week for three months to pay everything - food, heating, travel, prescription, council tax, house insurance (which IS compulsory if you have a mortgage), car running costs AND mortgage repayments.

    Then you get nothing for three months. Then, and only then, would the State have stepped in to help meet mortgage costs. You would have six months' arrears, though, and no prospect of making them up.

    Granted i would be "better off" if i had protection but that was not what we specifically asked our Mortgage "advisor".
    I have seen FOS uphold complaints where an adviser could prove he simply did what his client asked him to do on the grounds that he owed a duty of care.
    He lied to us and didnt explain it at all.
    As I say, you cannot prove your allegation and it is likely that a copy of the "statement of demands and needs" given to you at the time still survives.
    That is not the correct advise he should have given.
    On the contrary, pointing out the consequences of not being able to repay your mortgage and offering suitable cover was a discharge of his duty toward you.

    ]quote]We stopped paying one of the two payments he set up about a year ago.. at the yime we didnt realise which one it was. It turns out if was life insurance. As soon as we stopped paying it we received a letter from our mortgage advisor claiming if we didnt get lofe cover back up we would be breaching the contract of our mortgage![/quote]

    I have not seen the letter but I suspect it is more likely that you were breaching your contract with the adviser - particularly if you did not pay a fee for arranging the mortgage.
    We were both young at the time of getting the mortgage (19 + 20) and in our nievety we trusted what he said was fact.
    As I say, the mortgage offer would have made it quite clear that your assertions were not true.

    So if I saw that I would only be able to conclude that you did not read it. So I would then have to ask you why not? After all, it is a big decision.
    I want to know the correct way of filing a complaint.. too him? Or to IFA?
    Look at the Initial Disclosure Document he gave you when you first sought the adviser's assistance for details.


    Whilst posting the above you have made another post, so I will answer that too.

    m9yty wrote: »
    We asked the direct question "can we get a mortgage without mppi"

    The correct answer would have been yes.

    The answer we were given was no.

    Black + white.
    Unless it is in writing then, by definition it cannot be black and white. Do you have such a document?

    If not, the only black and white that would be available to me would, as I have said, be the "Key Facts" document and the mortgage offer - which would contradict your assertion.
  • dunstonh
    dunstonh Posts: 119,754 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    We asked the direct question "can we get a mortgage without mppi"

    The correct answer would have been yes.

    The answer we were given was no.

    Black + white.

    Problem is that it is not black and white. Evidence is black and white. What you have is an unprovable allegation. We are not doubting you. Just highlighting the problem with unprovable allegations.
    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.
  • GhIFA
    GhIFA Posts: 619 Forumite
    m9yty wrote: »
    It was while sorting my new life insurance policy out that i discovered paymentshield was ppi not life insurance as i thought it was (the only reason why i was still paying it)

    I see i dont have much chance getting anywhere but it seems all you IFA's are missing the point i was trying to put across.

    Whether i should have mppi or not i specifically asked for nothing unless it directly affected my chances of getting the mortgage.

    He would have been right in telling me i should have mppi or even i "need" mppi.. but he didnt. He told us if we could not get the mortgage without both mppi from payment shield and life insurance.

    That was a blatant lie + not correct advice.. we went to him to get advice + he took advantage of the fact we didnt know anything about mortages.

    Whether i claim it back or not. I have paid over £1500 to a company i didnt want to pay a penny to.. based on the incorrect advice of a mortgage advisor who clearly just wanted a cut from selling us something i specifically told him we didnt want.

    No, it seems you are missing the point that those of us with knowledge of how the complaints process works are trying to illustrate to you.

    It may well have happened the way that you said it, or it may not, but in making the complaint you need to provide the evidence. As has been mentioned previously, without that then the documentary evidence available will be used to ascertain whether your complaint is valid or not, and at present, based on what you have said that is likely to show that nothing has been mis-sold.
    I am an IFA. Any comments made on this forum are provided for information only and should not be construed as advice. Should you need advice on a specific area then please consult a local IFA.
  • m9yty
    m9yty Posts: 5 Forumite
    I have read + taken in what you have all said.

    I will not be making a complaint.

    And no i didnt read all the paperwork at the time which probably said i didnt need mppi or life insurance. I was 20 at the time and we (me and my pregnant partner) needed a mortgage regardless so we were going to get the one the FA offered us as he new alot more than we did about mortgages without reading all the paperwork (we wouldnt understand most of the paperwork any way)

    He did describe the mppi the way i said (u need it to get the mortgage)

    When i said "black + white" i meant "black + white" as in "wrong or right" or "night + day".. as in no grey area.. not as in pen to paper as some people wrongly interpreted.

    I realise it was a verbal conversation and it would be hard to prove. This is why i asked the question and thank you for the responses.

    To be honest if i thought i new enough about mortgages to confidently read through and understand the wads of paperwork that come with the mortgages
    then i wouldnt have used a mortgage advisor in the first place :D..

    I now have life insurance + i will have a good read through the payment shield paperwork and my uptodate company handbook to see if i need payment shield before decide whether to cancel or not.

    To be honest it used to be £15 a month + it jumped up to £25 whithout any of my circumstances changing which is one of the reasons i had it looked at by my pensions advisor (who informed me it was mppi not the life insurance i thought it was..) hense alarm bells rang as i thort i stopped paying ppi and i was just paying life insurance.

    Anyway lesson learnt. I need to start reading the paperwork myself as even i dependant advisors dont always tell you everything :-(
  • m9yty wrote: »
    I now have life insurance + i will have a good read through the payment shield paperwork and my uptodate company handbook to see if i need payment shield before decide whether to cancel or not.

    Do bear in mind that the policy may pay out in addition to any sick pay from your employer and if you are made redundant you may get a lump sum from the employer but NOT a replacement income - so you can claim under the policy as well.
    To be honest it used to be £15 a month + it jumped up to £25 whithout any of my circumstances changing
    If you think about it, the only change that would have a direct bearing on the policy would be falling ill or losing your job - i.e. a potential reason for a claim.

    Rather, the increase in premium will reflect the RISK of you having to claim. That is what insurance is about.

    In addition, the decision to increase the premium is taken by the insurer, not the adviser.

    Anyway lesson learnt. I need to start reading the paperwork myself as even i dependant advisors dont always tell you everything

    Regardless of what your adviser may, or may not have said, even the FSA has said "less is more", recognising that if an adviser tells his client absolutely everything they are likely to go onto "screensaver".

    So what I will look at is whether the evidence indicates that the client was in a position to make an informed decision. If I conclude that they probably were, I am unlikely to uphold a complaint.

    Even if not, I would think about what they would have been most likely to have done if they HAD made an informed decision. In your case, I would have decided that if you lost your income, you would probably have lost your home, leading to the family being put into bed and breakfast and possibly split up.

    I think £15 a month to protect against tht risk is something most people, if they properly understand the risk, would choose to pay.

    So again I would be unlikely to uphold the complaint.
  • Sorry to butt in to this but it came up on my search. I'm hoping the financial adviser will reply.

    I am pretty much in the same situation.

    My question is ...

    I get full pay for 6 months and half pay for 6 months after that. After speaking to some recently I was told I should have been sold a policy the was deferred, and probably cheaper, as I the policy I have with Paymentshield only pays for 12 months but I wouldn't need any payments for 6 months and then half payments for a following 6 months.

    I've now ended the policy after 10 years.

    I've also read on here that as I bought it though a mortgage adviser from an estate agent that they are not regulated so I would not be able to claim?

    Anyway - any replies much appreciated.

    Thanks
  • levi23 wrote: »
    I get full pay for 6 months and half pay for 6 months after that. After speaking to some recently I was told I should have been sold a policy the was deferred, and probably cheaper, as I the policy I have with Paymentshield only pays for 12 months but I wouldn't need any payments for 6 months and then half payments for a following 6 months.
    Possibly.

    However, Paymentshield policies were/are monthly premiums so that rules out the "up front premium added to the loan" argument. I realise you have not said that but if I were investigating the complaint I would cover that off at outset.

    Furthermore, I believe Paymentshield would pay out in addition to your sick pay. However, I was looking at a case last month where a borrower received the sort of level of sick pay that you mention. They were initially quoted the cost of full Accident Sickness and Unemployment cover but then actually bought Unemployment Only cover.

    That reduced the cost by about 40%. So you may have a case to argue that the policy was oversold.
    I've now ended the policy after 10 years.

    I've also read on here that as I bought it though a mortgage adviser from an estate agent that they are not regulated so I would not be able to claim?
    Although others are going to say that you cannot I am going to say that you might be able to.

    However, it is a bit of a long shot. First of all, the firm that sold you the policy must still exist. If they don't, because it predates regulation, the FSCS cannot help you and there is no one to claim against.

    The second is that they must have subsequently gone on to be directly regulated by the Financial Services Authority (and not, as many estate agents are, Appointed Representatives of somebody else). To that end, it will be helpful to know who the firm is.

    Assuming you can get over these hurdles then I think you may have a way forward.

    I do not think you can argue that you have a case for not purchasing unemployment cover because, apart from a serving Police Officer, none of us is immune from the risk of redundancy. That also means that if the product your adviser sold did not offer a standalone unemployment policy, this argument would not work but the fact is that Paymentshield did.

    So your argument would be that although you were sold full cover, you only needed unemployment cover because you had sick pay from your employer and, as the adviser could have offered unemployment cover only, the policy was oversold and page 15 of the Good Practice Notes issued by the Mortgage Code Compliance Board makes clear that cover should not be oversold.

    In theory, you could sue the firm over this issue using Moneyclaim Online. It would be more difficult as you would need to gather the evidence and there would be a fee for it - including finding out from Paymentshield how much unemployment cover alone would have cost you. So I would recommend FOS if you can.

    You will need to direct your complaint to the firm that sold the policy in the first instance, though.
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