Mis-selling of various Insurance's when taking out our first mortgage

Shelley1969

Before taking out our first mortgage back in 2001 with Nationwide, we met with one of Nationwide's financial advisors who conducted a Personal Financial Review (PFR). On the advise and recommendation of the Financial Advisor we agreed and signed for the various insurance policies. MPPI, Critical Illness Cover, Life Insurance (LTA) and joint Life Drecreasing Term Assurance (DTA). Before our two year review my partner and I decided to cancel the insurance cover for disablement and unemployment (MPPI) along with DTA and LTA, as we both felt we didn't need this cover. We also cancelled our Critical Illness cover before any premiums were paid. After viewing our statements we noticed that we were still paying premiums for LTA and DTA policies. We ceased paying for the LTA in July 2009 and the DTA plan in August 2009. Being first time buyers we were very naive in our decision makings. We made a compalint to Nationwide regarding our concerns, to which Nationwide replied stating they will not uphold our complaint as it has been brought out of time, as it is more than 3 years since the plans finished. Please could you advise were we stand, before going to the FOS. Many thanks, Shelley

[Deleted User]

You do realise you are complaining mainly about Life and Critical Illness cover, not PPI?
How can you say "we both felt we did not need this cover"? This was an advised sale with a proper review of your "demands and needs" and not simply tagged on insurance.

Did you already have existing cover elsewhere? If not, it is difficult to see how you can not need Life cover unless you are immortal!

In the same way, Critical Illness would have benefitted you or your partner and, of course, no one is immune to such a calamity.

Do remember that even MPPI is a valuable insurance which is still retailed today and, again, you don't seem to have provided valid reasons for mis-sale or (indeed) for cancelling the insurance.

Unfortunately, if Nationwide have correctly applied the time-bar you mention, you will not be able to approach FOS.

dunstonh

On the advise and recommendation of the Financial Advisor we agreed and signed for the various insurance policies. MPPI, Critical Illness Cover, Life Insurance (LTA) and joint Life Drecreasing Term Assurance (DTA).

All those things are expected to be recommended for a mortgage case.

We made a compalint to Nationwide regarding our concerns, to which Nationwide replied stating they will not uphold our complaint as it has been brought out of time, as it is more than 3 years since the plans finished. Please could you advise were we stand, before going to the FOS

There are multiple issues here:

1 - Most mortgage insurance complaints fail. Both at firm and FOS. Nothing in your post indicates any wrongdoing at point of sale.
2 - Advisers account for under 0.5% of complaints at the FOS and most are rejected. So, expectation of a successful complaint would be low.
3 - Timebars. You have three years from being reasonably aware of an issue or 6 years from the point of sale (whichever is longer) to make a complaint. You fail both.
4 - Need and Want. You say you didnt need it but what you probably mean is you didnt want it. You almost certainly had a need for those things as an adviser would do a shortfall analysis (unlike non-advised sales where they dont). The things you mention are expected to be needed. You may not have wanted them later but unless you could show they were not needed, then you dont have much of a complaint.

[Deleted User]

dunstonh wrote: »

You say you didnt need it but what you probably mean is you didnt want it.

Yes, the OP appears to have decided at a later date that they didn't want to continue spending on the insurance. There is no indication that they actually did not need the insurance. Hardly a mis-sale.

dunstonh

Moneyineptitude wrote: »

Yes, the OP appears to have decided at a later date that they didn't want to continue spending on the insurance. There is no indication that they actually did not need the insurance. Hardly a mis-sale.

And that means it is not mis-sold and it is the thing that allows the timebar to be activated. 3 years from cancellation.

Shelley1969

Moneyineptitude wrote: »

You do realise you are complaining mainly about Life and Critical Illness cover, not PPI?
How can you say "we both felt we did not need this cover"? This was an advised sale with a proper review of your "demands and needs" and not simply tagged on insurance.
We had cover for sickness and redudancy with our employers.

Did you already have existing cover elsewhere? If not, it is difficult to see how you can not need Life cover unless you are immortal! Yes we both had Life Insurance with our employers, which the Financial Consultant was aware of.

magpiecottage

Shelley1969 wrote: »

we met with one of Nationwide's financial advisors who conducted a Personal Financial Review (PFR). On the advise and recommendation of the Financial Advisor we agreed and signed for the various insurance policies. MPPI, Critical Illness Cover, Life Insurance (LTA) and joint Life Drecreasing Term Assurance (DTA).

That sounds like a proper advice process took place.

Before our two year review my partner and I decided to cancel the insurance cover for disablement and unemployment (MPPI) along with DTA and LTA, as we both felt we didn't need this cover.

How would you have paid your mortgage if you had lost your job, fallen ill or died? You would have received no State help for nine months by which time if no payments had been made you would almost certainly have been in a situation where it was not possible to save yur home.

We also cancelled our Critical Illness cover before any premiums were paid.

So no loss (and thus no grounds to complain) there then.

After viewing our statements we noticed that we were still paying premiums for LTA and DTA policies. We ceased paying for the LTA in July 2009 and the DTA plan in August 2009.

So you mean that you did not look at your statements from 2003 to 2009.

Being first time buyers we were very naive in our decision makings.

The law says that you cannot have a mortgage before you are 18. It also says that once you are 18, you are assumed to be competent to understand and make financial decisions unless and until a court rules otherwise. So claiming to be naive really amounts to saying "I was so stupid that it ought to have been obvious to the adviser that I was stupid".

From what you have said, the adviser seems to have recommended policies which met specific, and real, needs and you accepted that advice. That would not suggest stupidity.

Whether you were wise to then cancel the policies is a different question but in any case you took that action some time after the sale.

We made a compalint to Nationwide regarding our concerns, to which Nationwide replied stating they will not uphold our complaint as it has been brought out of time, as it is more than 3 years since the plans finished.

That sounds correct. Nationwide has always made clear that you could complain if you wished to. For most of 2001 it was a member of the Building Societies Ombudsman Scheme, with FOS taking over on 1 December that year.

Please could you advise were we stand, before going to the FOS. Many thanks, Shelley

Nationwide has done nothing wrong. If I had a case of this nature to consider I would have taken exactly the same position.

Shelley1969

Thank you all for your replies, apologies I am new to this site. My concerns are with Life Insurance and MPPI. We both had Life Insurance with our employers which covered us and our two dependants. We both had sickness and redudancy pay with our employers, of which full pay for sickness was paid to me by my employer from April 2003 - February 2004.

dunstonh

We had cover for sickness and redudancy with our employers.

irrelevant. MPPI pays out in addition and has no overlap with the rest. The FOS has been turning down complaints with 6 months full pay, 6 months half pay with MPPI.

Yes we both had Life Insurance with our employers, which the Financial Consultant was aware of.

Also, irrelevant. It is a discretionary payment that can be removed. It may also be paid to the wrong person. e.g. for unmarried couples without children it could be paid to the parent and not the cohabiting partner. it is normal for death in service to be disregarded for mortgages. It would be included in the personal provision shortfall analysis but seeing as DIS is typically only 2 to 4 times salary, it is not enough to make up the required financial need.

My concerns are with Life Insurance and MPPI. We both had Life Insurance with our employers which covered us and our two dependants. We both had sickness and redudancy pay with our employers, of which full pay for sickness was paid to me by my employer from April 2003 - February 2004.

Lets put aside your timebar for the moment....

Death in service with employer would not be enough. You were in a relationship (married/unmarried we dont know) and had two children. So, your life cover need would be about 10-15x your income plus debts. Your employer death in service would be around 2-4 times. So, you would be a long way short of your need.

MPPI pays out in addition to employer benefits. It is not restricted like some PPI. Redundancy above statutory is only paid if the company can afford it. So, it is not guaranteed.

Most MPPI complaints fail because mortgages are serious long term debts with lifestyle changing consequences if it goes unpaid. Most loan and credit card PPI complaints would succeed on your reason as they are short term debts with no lifestyle changing consequences if they go unpaid.

Your life assurance complaint has no legs whatsoever as you are seriously underestimating your financial need.

[Deleted User]

Shelley1969 wrote: »

My concerns are with Life Insurance and MPPI.

As already stated, your complaint was not valid and is now over. Nationwide have correctly applied the Time Bar and so you have no access to FOS which would likely not have upheld your complaint either.

Basically, you decided you didn't want to pay for these insurance policies long after you were (correctly) sold them. This is not mis-selling.

roonaldo

Was your death in service benefit from your employer enough to pay off the mortgage? If not then its irrelevant.

I wouldn't get too hung on having employer benefits, if your employer went bust you would get none of this from them and this is what insurance is for!

Mortgage PPI is good. It also pays out on top of sick pay too.

It's also a bit odd that you say this was an advised sale and the adviser checked your demands and needs. You said you told him what cover you had, but he advised you to take it anyway and you agreed anyway? It a bit odd that.