Alliance & Leicester Mortgage PaymentCover - Reclaim or not?

tadgh_99

Hello,

Long time reader first time poster on this site.

I took out a mortgage with Alliance & Leicester back in November 2001.

Having gone through some paperwork recently, it transpires that my mortgage has two policies attached to it, when I thought I only had one. The reason behind thinking there is only one is that both policies are around the same amount per month.

The first one, Life & Living Protection (Decreasing Cover) appears to be for critical illness & death.

The second policy, the Mortgage PaymentCover which covers accident, sickness & unemployment looks a lot like PPI.

Both policies started at the time of taking out the mortgage.

When taking out the mortgage I recall A&L saying that I would need to have a life insurance policy in place for the mortgage (as I understand most mortgage providers require).

But (from my recollection) they didn't explain that the Mortgage PaymentCover didn't have to be in place, neither did they advise of any cooling off period or that I could have purchased an alternative policy from another provider.

When taking out the mortgage, I was in quite a good job and had a fair bit of savings behind me, so wouldn't have really needed this PPI.

Have I been mis-sold? Should I make a claim against the Mortgage PaymentCover plan?

I have successfully claimed on my credit cards in the past. Would this have an impact should I submit a claim on the Mortgage PaymentCover?

If I do go ahead with a claim, is it the same FOS questionnaire and process that I submit?

Thanks in advance

dunstonh

When taking out the mortgage I recall A&L saying that I would need to have a life insurance policy in place for the mortgage (as I understand most mortgage providers require).

Not common nowadays but still occurred in 2001. Not an issue where the lender truly needs it.

But (from my recollection) they didn't explain that the Mortgage PaymentCover didn't have to be in place, neither did they advise of any cooling off period or that I could have purchased an alternative policy from another provider.

They dont have to say it doesn't have to be in place. The cooling off period is documented and sent in the post. There is and never has been any requirement to tell you that you can buy elsewhere.

When taking out the mortgage, I was in quite a good job and had a fair bit of savings behind me, so wouldn't have really needed this PPI.

Job is irrelevant with mortgages (except police and army). Savings can be an issue but typically you need around 2 years of outgoings.

I have successfully claimed on my credit cards in the past. Would this have an impact should I submit a claim on the Mortgage PaymentCover?

None whatsoever. Credit card PPI (like loan PPI) isnt highly regarded. Mortgage PPI is considered more important. The FOS have rejected cases where they are 6 months full pay and 6 months half pay with MPPI. yet that is a good complaint reason with loan and credit card.

This is also reflected in the fact that today, MPPI is one of only two types of PPI still sold.

If I do go ahead with a claim, is it the same FOS questionnaire and process that I submit?

At the moment, your reasons are misplaced, wrong or weak (in no order). The savings may be an issue but it depends on the amount.

tadgh_99

Thanks for the quick reply.

Savings at the time would have covered probably three years worth of outgoings. All the savings were with A&L at the time of the mortgage being taken out.

At the time, I was told "it would be best for me if I took the Mortgage PaymentCover plan".

I don't begrudge them selling insurance policies, I just have an issue with them selling one that was totally unsuitable for my needs.

dunstonh

At the time, I was told "it would be best for me if I took the Mortgage PaymentCover plan".

Nothing wrong with that statement at all. It is best advice and was recommended by the council of mortgage lenders to give such a statement.

I don't begrudge them selling insurance policies, I just have an issue with them selling one that was totally unsuitable for my needs.

If it was unsuitable then you need to give those reasons. At the moment, you havent given a reason for it being unsuitable. As i said, loans and credit cards have lots of easy reasons. MPPI is a different beast though. The savings issue is a potential one. Although any mortgage adviser could easily get round it with good documentation by saying that whilst you had savings, you considered them more important for longer term provision and didnt want to exhaust them on shorter term concerns. (or words to that effect).

However, if you do have reasons that mean it was totally unsuitable then you should give those. Unsuitable is a good strong reason as long as your definition is of unsuitable is right.

magpiecottage

tadgh_99 wrote: »

Savings at the time would have covered probably three years worth of outgoings. All the savings were with A&L at the time of the mortgage being taken out.

That suggests you borrowed more than you needed to rather than that the PPI was missold.

dunstonh wrote: »

Nothing wrong with that statement at all. It is best advice and was recommended by the council of mortgage lenders to give such a statement.

The Mortgage Code Compliance Board was even stronger in its views.

tadgh_99

Thought I would just drop a note with an update.

Taking on board the comments to my original post, I felt a little disheartened about a successful conclusion to a possible complaint with Santander (nee Alliance & Leicester).

However, after a couple of months of umming and ahhing, I still felt that although my reasons were misplaced, wrong or weak, I had been mis-sold the Payment Cover policy.

I duly contacted the PPI complaints team at Santander and was issued with a Santander MPPI questionnaire (which differed slightly from the normal PPI questionnaire).

After a couple of phone calls and a completed FOS questionnaire (the original had been spoilt) to the complaints team, I received a very nice letter this morning that stated

“I am upholding your complaint, as I am unable to confirm PaymentCover was appropriate for you at the time it was sold” together with a nice little offer of over £7k

I must add that the reasons I gave were the same as those covered in my original post albeit elaborated on. One additional area I did add in was the cover provided by my employer at the time.

So, thanks for the comments, but, in this instance, I’m glad I followed my instincts instead.