Mortgage Protection Plan

Shopgirl1301

Hi Everyone, new to this forum so please bear with me. After my ex-husband nagging me to claim for PPI from HSBC I called them yesterday and they said I had PPI on 2 credit cards and a "Flexi-Loan" and they will raise my complaint, gave me a reference number and said they would write to me within the week, great, so I found this site and read through and will also write off, using templates, to other credit cards etc. Easy so far, now the difficult question and I hope I'm in the right place....

New husband and in approximately 1998 we took out a mortgage with HSBC, had a meeting and were told to go for the Mortgage Protection with Critical Illness Benefit, didn't have a clue, but was advised the mortgage would be accepted easier with this, this was cover for £85,422.00, decreasing over the policy term...forgot about it as was taken out of hubby's business account with HSBC.

Tidying up accounts last month and noticed a payment of £35.46 for HSBC in his accounts, didn't know what it was, thought it was a life policy, needless to say feel very ashamed as this is the policy way back for the mortgage, problem is we moved about 6 years ago to Northern Rock from HSBC, they didn't tell us about the policy and we've been paying for it ever since, yet have no mortgage with them and our mortgage now is higher than this amount anyway. I cancelled the policy off the direct debit on online banking and wondered whether I can claim for this, hope that all made sense, any advice would be gratefully received.

Many thanks

Wendy

[Deleted User]

Shopgirl1301 wrote: »

problem is we moved about 6 years ago to Northern Rock from HSBC, they didn't tell us about the policy and we've been paying for it ever since, yet have no mortgage with them and our mortgage now is higher than this amount anyway.

I'm afraid it was your own responsibility to cancel this, not the Bank's. However, if you write to the Bank and explain the circumstances, they might look favourably on it and grant you a refund for the period after you left them. Realise that you have no right to complain and word your request accordingly for maximum return.

Good luck.

misschicken

Mortgage Protection is a term which can be used to mean Life Insurance (rather than PPI) so this was a Decreasing Term and Critical Illness policy (life insurance). In 1998 HSBC were still making life insurance/mortgage protection a condition of their mortgages so it may also have been something you had to have anyway - and would have been a sensible thing to have. If you still have any original mortgage documents it will say if it was a condition of the mortgage.

I'm not sure on what basis you'd be lodging a complaint about the policy but there are other better qualified people on the forum who know all about mortgage related products who can tell you for sure if anything sounds odd about the policy.

dunstonh

didn't know what it was, thought it was a life policy, needless to say feel very ashamed as this is the policy way back for the mortgage,

It is life assurance (plus CI in your case).

problem is we moved about 6 years ago to Northern Rock from HSBC, they didn't tell us about the policy and we've been paying for it ever since, yet have no mortgage with them and our mortgage now is higher than this amount anyway.

You wouldnt expect them to tell you about it as it doesnt matter who the lender is. It is a standalone product. Indeed, the person that should cover this is the new mortgage adviser. They should work out if its better to keep the existing one and arrange a top up one (if you borrow more) or replace it with a complete new one and advise you accordingly.

I cancelled the policy off the direct debit on online banking

So, as it stands, you have cancelled the life assurance and CI cover for your mortgage. Have you checked to see if you have adequate cover elsewhere?

wondered whether I can claim for this

No wrongdoing has been done by HSBC. Northern Rock may have given you poor advice if you used an adviser. However, if you didnt use an adviser and just a bank clerk to handle the mortgage (or dealt with it on DIY basis) then it is your responsibility to know what you are doing.

At the moment, I would be more concerned about whether you have the right life assurance for the mortgage or not.

As for the original sale, unless you are immortal or single with no dependents, there is no logical reason to complain about the original sale. A married couple would logically take out such products and have the financial need to do so. Plus, as mentioned above, the 90s still saw many lenders requiring life assurance as a condition of borrowing and that is allowed.

[Deleted User]

dunstonh wrote: »

At the moment, I would be more concerned about whether you have the right life assurance for the mortgage or not.

Is it not likely that the new mortgage provider has arranged a different policy for this, Dunstonh?

Shopgirl1301

Thank you so much for all of your advice, yes we have adequate life insurance now, thank god, just wanted to check.

dunstonh

Moneyineptitude wrote: »

Is it not likely that the new mortgage provider has arranged a different policy for this, Dunstonh?

Possibly. If it was an adviser/broker, they would look at using the existing plus top up vs full replacement. They would advise accordingly but that also means they carry the liability for the advice going forward. So, if they recommended replacement life assurance, they should also have recommended cancellation of the existing plan. If they failed to do that or failed to take the existing plan into account in their advice then that could be a potential mis-sale.

If the person at NR was just a bank clerk handling the mortgages but not authorised to give insurance advice (which is very common), then they would only deal with the mortgage.

Whatever the scenario, HSBC have done no wrong. Northern Rock may have (or the broker if one used).

dunstonh

Shopgirl1301 wrote: »

Thank you so much for all of your advice, yes we have adequate life insurance now, thank god, just wanted to check.

In which case, you may wish to check why the adviser that arranged this life assurance didn't advise you to cancel the old life assurance.

Shopgirl1301

Unfortunately the broker that sorted the new mortgage is no longer working in our town, not sure where he went? Lesson learnt but at least we are £34 better off now