Error in mortgage PPI application

PippiShortsock

I’ve seen some very stern messages about the futility of making an application for a mortgage PPI refund on here, so I post the following with some trepidation…

I didn’t remember having a payment protection policy for my previous mortgage as I do not for my current one, but on checking my files I find that I did have such a policy when I was with my previous lender between 1999 and 2006.

I am puzzled about this because, as a public sector worker, any redundancy settlement would have covered my income for over a year. I was also covered by my employer for accident and sickness for six months at full pay and six months at half pay. This is why, when I took out my current mortgage with the help of a broker in 2006, I did not take out payment protection insurance.

I took out three mortgages with my previous lender – one in 1999 and smaller top-ups in 2003 and 2005. In 1999, I made the request over the phone and the lender sent me the completed application form to check and keep for my records. I received three versions of this application form during the process and each have the section on payment protection completed as follows:

Would you like us to arrange Mortgage Payment Protection? – Yes
If yes:
Is accident and sickness cover required? – Yes
Is unemployment cover required? – Yes
Are you currently in active employment? – No
Unaware of any pending unemployment? – No

Now, clearly those last two answers are incorrect. If they had been correct, they would have rendered me ineligible for the policy. I have a good eye for detail and it is highly unlikely I did not point this out to them at the time. However, it was not corrected in any of the three iterations of the application form which they completed on my behalf. For the second and third mortgages I took out with this lender, the payment protection policy was just extended to cover the additional borrowings without further application forms being completed.

So I have two questions:
• Does this error in the application form lend weight to the argument that my circumstances and requirements were not examined properly when I was sold this product?
• Do the circumstances of my employee benefits – for redundancy if not for accident and sickness – give me a case for claiming a refund?

I realise I should not have agreed to pay for a product which did not meet my needs and after so many years I cannot understand why I did so. I did not for any other loans and it does not appear I did so for the mortgage I had before 1999, so I can only assume that the salesperson I spoke to in 1999 was very persuasive.

Insider101

There is no such thing as an "application for a refund". If you think something's been done wrong you make a complaint. But buying something and then thinking you shouldn't have done a bit further down the line is not grounds for complaint.

As for the errors on the form, it is simply a typo. No relevance whatsoever to a complaint about PPI.

-taff

PippiShortsock wrote: »

I am puzzled about this because, as a public sector worker, any redundancy settlement would have covered my income for over a year. I was also covered by my employer for accident and sickness for six months at full pay and six months at half pay. This is why, when I took out my current mortgage with the help of a broker in 2006, I did not take out payment protection insurance.

If you had read most of the responses then you would know that the above are good reasons for not paying PPI on a credit card or a loan because these are short term insurances, but not good reasons for mortgage PPI which typically doesn't overlap with these.

Redundancy is never assured, and critical illnes, where you might have been sick for longer thasn ayear are also not covered.

dunstonh

I am puzzled about this because, as a public sector worker, any redundancy settlement would have covered my income for over a year.

Not an issue with MPPI. It is with loan and credit card PPi though. FOS have been rejecting complaints on that basis given the long term nature of mortgages and the consequences of not meeting the mortgage payment.

Now, clearly those last two answers are incorrect. If they had been correct, they would have rendered me ineligible for the policy.

Why are those last two clearly incorrect? I can see one of them being incorrect but not both. If you were not in employment or were aware of pending unemployment then you would not be eligible. A mistake of the form does not mean you get lucky unless the mistake results in you becoming ineligible.

Does this error in the application form lend weight to the argument that my circumstances and requirements were not examined properly when I was sold this product?

No. A clerical error could just be that.

Do the circumstances of my employee benefits – for redundancy if not for accident and sickness – give me a case for claiming a refund?

With the FOS rejecting complaints on that basis for MPPI then the answer has to be no.

PippiShortsock

Thank you for your replies.

I take the point about mortgages being a long term product, but my PPI only offered cover for 12 months anyway so the unemployment aspect of it at least was useless. Or would I have been able to claim on that for 12 months after the redundancy payment ran out?

[Deleted User]

You could often claim in addition to any redundancy payment.

Weren't the "stern" messages in other threads about mortgage PPI enough for you?:D

Insider101

PippiShortsock wrote: »

Thank you for your replies.

I take the point about mortgages being a long term product, but my PPI only offered cover for 12 months anyway so the unemployment aspect of it at least was useless. Or would I have been able to claim on that for 12 months after the redundancy payment ran out?

Redundancy payments don't affect your claiming benefits under PPI. So even if you got a big pay off (not guaranteed) you could claim on your policy.

The only thing that affects it is payment in lieu of notice, since you are deemed to still be working for the company until the notice period expires.

dunstonh

I take the point about mortgages being a long term product, but my PPI only offered cover for 12 months anyway so the unemployment aspect of it at least was useless. Or would I have been able to claim on that for 12 months after the redundancy payment ran out?

MPPI does not overlap with redundancy payments. Whether you get paid a large lump sum or statutory minimum, MPPI will still pay out.

PippiShortsock

Following the advice given me by the people on this forum I didn’t pursue this PPI claim. However, out of the blue, I’ve just been sent a PPI consumer questionnaire by the company responsible for selling me the PPI giving the account number for my last mortgage top-up taken out in 2006 (but ignoring the other two). It specifically references the fact that this was PPI for a mortgage and goes on to say that in response to the FCA’s regulatory measures they have reviewed their sales and identified certain problems. They state that this means I may have been mis-sold PPI. The problems relate to the fact I should have been told the PPI was optional and that my lender was not providing advice about the product’s suitability.

Is it part of the new regulations that policy issuers are required to contact old clients? Obviously, this letter doesn’t guarantee my claim would succeed, but it seems odd to me that the banks are actively seeking new claims!

[Deleted User]

PippiShortsock wrote: »

Obviously, this letter doesn’t guarantee my claim would succeed, but it seems odd to me that the banks are actively seeking new claims!

It's not odd at all, the letters allow financial institutions to start the clock ticking on a time bar of possible future complaints.

You can certainly still complain if you want, just as you could back in September last year, but the advice given back then still applies.

roonaldo

moneyineptitude is right, it will start the clock ticking for a time bar in 3 years. a large company I have worked for only had a 20% response for letters sent to customers inviting them to complain (doesnt necessarily mean they were all mis-sold). They know they may have to pay out on some for the ones who responded, but in 3 years time its a time bar with 2 fingers to the rest! drawing a closure on PPI complaints for them.

going back to first post, an admin error on form is very unlikekly to affect a claim. your employment circumstances would be judged at time of the claim, if in fact the correct employment details were e.g. you had been in permanent employment for 10 years and then made redundant, then the incorrect tick on the form will make no difference.