PPI claim against Underwriter, Finance Company or Dealership?

ShootTheMoon

Hello,

I am new, and looking for some advice as I am a little confused.
As you will see below the Underwriter's are saying to claim from the Finance Company, who in turn are saying to claim from the Dealership!

I was mis-sold PPI by a salesperson at a BMW Dealership in 2000 (self employed being one of several reasons). The company I then paid my PPI premium to was BMW Financial Services. BMW FS were unregulated until 2005 so the FOS have said they will raise my complaint with the Underwriter (London General Insurance) who was regulated at the time of sale.

I have written to BMW FS, who replied:

"According to our records you did purchase PPI for the following agreements... however, for claims in contract the cause of action accrues on the date of the breach of contract and a six year limitation period runs from this date... If you wish to continue your complaint it should be addressed to the dealership who sold you these products."

I have written to LGI, who replied:

"LGI acted as the product provider and was not in any way responsible for the sale of the policies... BMW FS are authorised and regulated by the FSA and as such are responsible for the PPI that was sold to you."

I have not yet written to the Dealership. I know the six year bit is misleading and BMW FS were not regulated until 2005, so my questions are:

1. Does BMW FS being unregulated at the time of sale free them from any possible action, legal or otherwise?
2. As they suggest, can I take up my complaint directly with the Dealership who mis-sold the PPI (who are still trading) and are there any known examples of this being a successful route?
3. Is there any point in going down the Underwriter route - which I believe is the only path the FOS can offer me?
4. Does the Underwriter have any responsibility whatsoever to make sure policies sold on their behalf are vaguely fit for purpose? (My policies were completely unsuitable and would NEVER have paid out).
5. Does anybody know of any cases where the FOS have upheld against LGI?


Many thanks.

dunstonh

1. Does BMW FS being unregulated at the time of sale free them from any possible action, legal or otherwise?

The retailer has the liability in the vast majority of cases. That is the dealership in your case. The lender has no liability at any point of time unless the lender was also the seller or the seller was an agent of the lender.

Dealers only became regulated in Jan 2005. So, they dont have to consider pre-regulation complaints. The lender has no liability.

2. As they suggest, can I take up my complaint directly with the Dealership who mis-sold the PPI (who are still trading) and are there any known examples of this being a successful route?

It is unlikely a dealership will voluntarily consider a pre-regulation complaint. You would expect to be refused with it being pre-regulation. Seeing as the FOS have told you to try insurer, it would appear they dont consider it likely either.

. Is there any point in going down the Underwriter route - which I believe is the only path the FOS can offer me?

It is the only option left to you. It works in probably 2% of cases.

4. Does the Underwriter have any responsibility whatsoever to make sure policies sold on their behalf are vaguely fit for purpose? (My policies were completely unsuitable and would NEVER have paid out).

Technically, no. The insurer has no liability for the sale. They were not present for the sale. It was not their staff member you spoke to. The seller has the liability. However, in a tiny number of cases, there is a bit of a loophole on the setup of the arrangements between certain dates where it can be possible that the insurer carries the liability. It is rare but can happen.

it is also important to note that the requirements on sold cases are different to advised cases. No dealership would operate on advised basis.

5. Does anybody know of any cases where the FOS have upheld against LGI?

No.

ShootTheMoon

I received a letter this morning from the FOS and after three years of legals the Underwriter has accepted responsibility for the sale of my PPI. The Ombudsman says my case will now be examined by an Adjudicator and a decision made. Any ideas how this might pan out? Bearing in mind I was self employed at the time, PPI was single premium, I was certainly never told I could buy a similar policy on the high street and even if I did fall ill I had the ability to make repayments. If that is not enough, the whole PPI thing was never properly explained to me in the first place!

-taff

PPI also pays out to self employed, it depends on what the conditions were.
They don't tell you in Tescos that things are cheaper in Asda, they're not required to.
The third one may have a positive impact.

It was explained to you, you just don't remember. Or, if it wasn't, you signed to say it had been so glossed over that bit of the paperwork and you don't remember.

ShootTheMoon

PPI does pay out to self-employed, in about 1% or less of all cases. You had to go bust or cease trading to make a claim - and by cease trading it meant you could never return to your profession again.
I guess PPI would have been briefly explained at the outset, however the onus cannot be on the consumer to read through pages and pages of legally worded documents to see if a policy is suitable. It is surely down to the provider to give a proper and thorough explanation? Any exclusions and limitations were certainly never explained to me. Insurance is all about disclosure, and that has to work both ways because if I fail to tell them something then my policy would become invalid.
It doesn't matter what was signed, with the sale of PPI insurance I am certain the provider had to make it perfectly clear "that another policy could be taken out elsewhere which would potentially be cheaper." You hear it all the time these days when you buy any financial product, and a quick look at reasons for mis-sold PPI highlights that as being one of them.

dunstonh

You had to go bust or cease trading to make a claim - and by cease trading it meant you could never return to your profession again.

Not quite. You had to cease trading. The bit about not returning to profession is not correct. What you do years in the future is not something that matters.

I guess PPI would have been briefly explained at the outset, however the onus cannot be on the consumer to read through pages and pages of legally worded documents to see if a policy is suitable.

Suitability is something that only matters on advised cases. On non-advised cases it does not.

t is surely down to the provider to give a proper and thorough explanation?

no. Especially where there product provider is not the one selling it.

It doesn't matter what was signed, with the sale of PPI insurance I am certain the provider had to make it perfectly clear "that another policy could be taken out elsewhere which would potentially be cheaper."

That is not correct. There is and never has been any requirement to do that.

magpiecottage

Nowadays, any insurance has to be sold with a Key Facts document which explains the product in ways that are clear, fair and not misleading.

However, that has only been a legal requirement since 14 January 2005.

Prior to that, the General Insurance Standards Council had a code which it expected its members to comply with. Any business that was a member which went on to be directly authorised by the FSA on 14 January 2005 must submit to the jurisdiction of FOS in respect of the sale of such a policy.

You have two problems with this.

The first is that few, if any, motor dealers subscribed to the General Insurance Standards Council's code at all and none did in 2000, the time of your purchase, because it did not exist until 2001.

ShootTheMoon wrote: »

It doesn't matter what was signed, with the sale of PPI insurance I am certain the provider had to make it perfectly clear "that another policy could be taken out elsewhere which would potentially be cheaper." You hear it all the time these days when you buy any financial product, and a quick look at reasons for mis-sold PPI highlights that as being one of them.

As dunstonh says, this is not true.

People can believe it all they want but, just like Piltdown Man, mere belief in it does not stop it being a fallacy.

ShootTheMoon

Thanks for clearing that up chaps, annoying because I have read in so many different places it is a valid reason for mis-sell. It doesn't really matter, there are several other ways I was mis-sold.

Suitability was probably the wrong choice of word from me and I see that only applies to advised sales, however according to the FOS:

"In cases involving non-advised sales, we would expect a financial business to have given the consumer information that is clear, fair and not misleading... this includes the need to draw the consumer's attention to any significant terms and conditions of the policy."

Being self-employed, this clearly did not happen! If I knew I would have to declare to the revenue I was no longer trading, or go bankrupt to be able to make a claim why on earth would I have taken out a policy? Obviously if they had disclosed any of that there would clearly have been no sale.
I would say they were wholly unclear, unfair and thoroughly misleading and did not draw my attention to the significant terms and conditions of the policy!

As you said there are further hurdles to overcome, so we will see what happens from here.

Nearlyold

"In cases involving non-advised sales, we would expect a financial business to have given the consumer information that is clear, fair and not misleading... this includes the need to draw the consumer's attention to any significant terms and conditions of the policy."

Being self-employed, this clearly did not happen! If I knew I would have to declare to the revenue I was no longer trading, or go bankrupt to be able to make a claim why on earth would I have taken out a policy? Obviously if they had disclosed any of that there would clearly have been no sale. "

You don't have to have gone bankrupt - not sure where you've got that one from. The requirement to sign on/cease trading normally only applies to the self employed "Redundancy" cover element it and is not a great deal different to that which an employed person would have to do to make a successful claim. You would of course still have been able to make an ill - health claim

dunstonh

if the policy terms said that you could only claim if you were bankrupt then that would be considered onerous and a good complaint reason. If they are not onerous then its not an issue:
e.g. http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=36918