Mortgage payment protection exclusions

perlot

Hi all, first timer here!

I am in "discussion" with a bank regarding reclaiming the mortgage payment protector payments I made. I have got the first reply basically saying "no you can't reclaim them". Their argument is that it was a non-advised decision and everything was made clear. I have two questions:

1. The bank ceased selling the product, or anything like it, in 2008, can I use this as proof that they know it's not a valid product?

2. I have a vague memory of enquiring about claiming on the insurance once, and was told that my redundancy payout and savings would be taken into account first i.e. if I got redundancy money the insurance wouldn't start paying out until that was used up, and that if I had savings these would need to be used up too. Is that correct or am I remembering that wrong? Is that a normal part of a policy?

Thanks all.

p.

[Deleted User]

perlot wrote: »

1. The bank ceased selling the product, or anything like it, in 2008, can I use this as proof that they know it's not a valid product?

No. How would it be "proof" of any such thing?

perlot wrote: »

2. I have a vague memory of enquiring about claiming on the insurance once, and was told that my redundancy payout and savings would be taken into account first i.e. if I got redundancy money the insurance wouldn't start paying out until that was used up, and that if I had savings these would need to be used up too. Is that correct or am I remembering that wrong? Is that a normal part of a policy?

You can check the terms of the policy easily enough, but basically you could not claim on the insurance during the initial months of your redundancy. Nothing to do with any payment you received being "used" up, though.
This is not a reason for complaint, I'm afraid.

perlot

Thanks for this,

I think from a legal stand point, if a company has stopped selling a product because they acknowlege that it is not fit for purpose, this would give you grounds to complain. If someone stopped selling a car because it was found to be dangerous, you would be allowed to get a refund.

It is a very old policy, so I don't have the details of the documentation. You can claim after the first 30 days though normally? Once you are redundant, you no longer have a job, so you can claim. Just to be clear, I don't mean when you are TOLD you are redundant, I mean when you have left the company, usually with a redundancy pay off. Can you claim straight from then?
For example, in January you are made redundant, your contract is terminated then and you are given 3 months salary as a settlement. Can you claim in the insurance for February's mortgage payment, or do you have to wait until May's, when your three months money is gone?

If you have to wait for your redundancy period to expire (i.e. for the money to dry up) then this is not what the policy claims to do, so grounds for a complaint surely?

[Deleted User]

perlot wrote: »

if a company has stopped selling a product because they acknowlege that it is not fit for purpose, this would give you grounds to complain.

They haven't actually acknowledged any such thing. I defy you to find anywhere where they have said this?
Also, the PPI debacle is not a legal issue.

perlot wrote: »

. You can claim after the first 30 days though normally? Once you are redundant, you no longer have a job, so you can claim.

No, you can only claim when you are in receipt of Job Seeker's allowance-not before



Are you sure you've only had a "first" reply from the Bank? Normally their response is a "full and final" one and you then can only refer your complaint to the Ombudsman...

perlot

Well OK, whatever, I don't want a debate, I go to other forums for that...

What about the second part of my last reply... what do you think of that? Am I right in what I'm saying? Does PPI start the moment you are not employed by someone, or after your redundancy pay off expires?

perlot

Yes, looking at the letter they are calling it a "full and final" reply as you say, but I'm not going to let that stop me!

This is the bit I am confused about. the "key facts" sheet I've got says "you will receive payment after 30 days of unemployment", it doesn't mention redundancy, or job seekers allowance or any of that... so that means I wasn't informed properly when I bought it...

doesn't it?

roonaldo

perlot wrote: »

Thanks for this,

I think from a legal stand point, if a company has stopped selling a product because they acknowlege that it is not fit for purpose, this would give you grounds to complain.

but PPI is still sold today. PPI is not illegal, never has been.

If someone stopped selling a car because it was found to be dangerous, you would be allowed to get a refund.

no they dont. they usually recall vehicle for repair.

It is a very old policy, so I don't have the details of the documentation. You can claim after the first 30 days though normally?

this is normal, any insurance has some sort of excess

Once you are redundant, you no longer have a job, so you can claim. Just to be clear, I don't mean when you are TOLD you are redundant, I mean when you have left the company, usually with a redundancy pay off. Can you claim straight from then?

You need to be made involuntary redundant. If you leave of your own free will then thats a life choice you've made. You cant have insurance for life choices its not what its for, only unforseen events.

For example, in January you are made redundant, your contract is terminated then and you are given 3 months salary as a settlement. Can you claim in the insurance for February's mortgage payment, or do you have to wait until May's, when your three months money is gone?

if the 3 months is part of a redundancy then you can put your claim in after the 30 days. if you are being paid for 3 months (like on gardening leave) you are not redundant until after.

If you have to wait for your redundancy period to expire (i.e. for the money to dry up) then this is not what the policy claims to do, so grounds for a complaint surely?

No, you are redundant the day your employment ceases. If your redundancy package is the same some as 3 months pay then you are unemployed from that the day employment ends not 3 months later. You need to register for JSA when employment ceases.

perlot

Ah right, thanks for that. This, along with some things I have just seen posted in response to other questions seems to have answered my questions.

If I understand it right, Mortgage Payment Protection is very different to the other PPI issues and much harder to claim back for due to the nature of the product it is insuring.

Thanks again.

roonaldo

perlot wrote: »

Yes, looking at the letter they are calling it a "full and final" reply as you say, but I'm not going to let that stop me!

This is the bit I am confused about. the "key facts" sheet I've got says "you will receive payment after 30 days of unemployment", it doesn't mention redundancy, or job seekers allowance or any of that... so that means I wasn't informed properly when I bought it...

doesn't it?

You are not unemployed until registered as unemployed (ie registered for JSA). When sold PPI, as they are not benefits advisers so they cannot go in depth with the fine details of how to make an unemployment claim. You also cannot just walk out of a job and make register for JSA either. JSA is to help people who have lost their jobs not quit their jobs.

roonaldo

perlot wrote: »

Ah right, thanks for that. This, along with some things I have just seen posted in response to other questions seems to have answered my questions.

If I understand it right, Mortgage Payment Protection is very different to the other PPI issues and much harder to claim back for due to the nature of the product it is insuring.

Thanks again.

Yes thats correct. Because-
1. It's monthly premium which is good and premiums dont incur interest (single premium is bad)
2. It can be cancelled at any time.
2. It's to protect your mortgage on home (not a pointless credit card)
3. As its a mortgage, it's often sold with a huge paper trail (as often a credit card is just a form filled in and signed, thats it) so sales can be defended more easily.

magpiecottage

perlot wrote: »

I don't mean when you are TOLD you are redundant, I mean when you have left the company, usually with a redundancy pay off. Can you claim straight from then?
For example, in January you are made redundant, your contract is terminated then and you are given 3 months salary as a settlement. Can you claim in the insurance for February's mortgage payment, or do you have to wait until May's, when your three months money is gone?

It would depend. If you were told today that you were being made redundant on 31 January (which, as I write, is a week away) then if you were on a week's notice you would be redundant from 31 January.

If they told you on 31 January they were making you redundant and not to come back, they would have to pay you the notice period, be that a week, a month, three months or whatever. They might choose to pay it to you up front.

I once found myself in a situation where I was in effect put on garden leave in September but it was only at the end of December that they formally told me they were terminating my contract of employment. However, I had three months' notice so they had to pay that too, so legally it was only at the end of March that I would have been able to have been deemed unemployed and at the end of April that I would have first received payment.

In addition, I received a futher 6½ months' redundancy pay which would have lasted me until the following October but that would not have counted.

(In reality, I walked straight into another job in the January but it illustrates my point).