HSBC mortgage PPI

addedvaluebob

roonaldo wrote: »

HSBC's PPI was optional in 2005. This was a regulated insurance sale sold alongside a regulated mortgage sales. You would have been given a demands and needs statement and Key Fact Illustration which certainly would have taken more than 1 minute.

All of which assumes the adviser did their job properly. Over the years I have assessed thousands of advisers supposedly 'doing their job' and when you watch them, either live or on video, it is patently obvious that they don't follow the process they are supposed to unless and until they are independently assessed. If they had done their job properly in the first place we wouldn't have had all the mis-selling to start with

dunstonh

If they had done their job properly in the first place we wouldn't have had all the mis-selling to start with

PPI is not regarded as an adviser failure but a non-advised failure. Adviser cases only account for around 1% of cases at the FOS and most get rejected.

magpiecottage

saver861 wrote: »

In my case, it was part of my contract of employment within public sector

As I recall, your argument was NOT that you had a contractual right to redundancy payments but that you had a contractual right to take early retirement if, and only if, you were at or above the legal minimum age at which you could retire. At the time that was 50, now it is 55. You were, from your posts elsewhere, still in your 40s. Therefore had you been made redundant at that time, you would not have been entitled to early retirement.

In addition, the early retirement pension would be based only on the service achieved to the date of leaving.

If you had started at 16 and been made redundant at 56 you would have received your full pension entitlement. If you started at 48 and were made redundant at 52, you would have received tenth of it - an amount unlikely to be sufficient to keep up repayments on a mortgage.

I probably won't be going to the FOS with my complaint and will likely accept the response from the bank, if they decline my complaint and provide convincing reasons.

The bank may uphold but since, at the point of sale, you were still at risk then that is likely to be due to a misunderstanding by its own staff. It is possible that your wife's cover was missold as she was over 50 but that would depend on the length of service at the time the policy was sold.

saver861

magpiecottage wrote: »

As I recall, your argument was NOT that you had a contractual right to redundancy payments but that you had a contractual right to take early retirement

Nearly right .... part of my argument was both of the above. I and my wife did have contractual rights to redundancy which at the time was one or one and half weeks over 41 with an enhancement multiplier of 2.2. Generous and my recent redundancy settlement gave me over 12 months of take home pay. The point being that there was a contractual arrangement that would have provided several months salary - the exact amount could have been calculated at the time in line with the service accrued etc.

magpiecottage wrote: »

if, and only if, you were at or above the legal minimum age at which you could retire. At the time that was 50, now it is 55. You were, from your posts elsewhere, still in your 40s. Therefore had you been made redundant at that time, you would not have been entitled to early retirement.

True I would not have been entitled to pension had I been made redundant before 50. However I was 46 and thus just short of the 50 marker and I had more than enough assets along with redundancy pay for two plus years take home pay equivalent.

magpiecottage wrote: »

The bank may uphold but since, at the point of sale, you were still at risk then that is likely to be due to a misunderstanding by its own staff. It is possible that your wife's cover was missold as she was over 50 but that would depend on the length of service at the time the policy was sold.

See I don't get why you would say I was still at risk. For all the reasons outlined previously, existing polices, savings, sick pay, assets, etc I can show we would have had two plus years salary to call on.

What would define a non risk situation - i.e. how many months take home salary should someone have access to so that it would be nil or minimum risk? Surely two years would be sufficient? My argument is not based solely on redundancy payments but those along with all our other assets, benefits at the time of sale.

As for my wife's cover being mis-sold - it is a joint policy.

magpiecottage

saver861 wrote: »

my recent redundancy settlement gave me over 12 months of take home pay.

Did you pay Income Tax on the entire amount of your redundancy payment, or was the first £30,000 tax free?

The point being that there was a contractual arrangement that would have provided several months salary - the exact amount could have been calculated at the time in line with the service accrued etc.

The point being that contractual redundancy pay is entirely taxable as earned income (I think it is subject to National Insurance as well).

True I would not have been entitled to pension had I been made redundant before 50. However I was 46 and thus just short of the 50 marker and I had more than enough assets along with redundancy pay for two plus years take home pay equivalent.[/quote]Then what would you have done? The money would have stopped and you would have, maybe, 15 years mortgage to go.

I don't get why you would say I was still at risk. For all the reasons outlined previously, existing polices, savings, sick pay, assets, etc I can show we would have had two plus years salary to call on.

Whilst I disagree with your logic, I don'tv get why, if you thought you had all that in reserve, you didn't tell the adviser you didn't want the cover because of it.

What would define a non risk situation

There are no non risk situations in this world. There are degrees of risk, there are different types of risk but there is always risk.

As for my wife's cover being mis-sold - it is a joint policy.

Because we do not know how much her pension would have been if she had been made redundant, we have insufficient information to know.

saver861

magpiecottage wrote: »

Did you pay Income Tax on the entire amount of your redundancy payment, or was the first £30,000 tax free?


The point being that contractual redundancy pay is entirely taxable as earned income (I think it is subject to National Insurance as well).

Not sure whether there is different regulations for different sectors but in my case first £30,000 is tax free and there is no NI deductions.

magpiecottage wrote: »

True I would not have been entitled to pension had I been made redundant before 50. However I was 46 and thus just short of the 50 marker and I had more than enough assets along with redundancy pay for two plus years take home pay equivalent.

Then what would you have done? The money would have stopped and you would have, maybe, 15 years mortgage to go.

but this is where your assertion becomes a little nonsense. Surely nobody can protect themselves for 15 years. The insurance will only pay for 12 months in any case. if I have two years income to protect myself that would be more than adequate to either get another job, downside house etc etc.

magpiecottage wrote: »

Whilst I disagree with your logic, I don'tv get why, if you thought you had all that in reserve, you didn't tell the adviser you didn't want the cover because of it.

Well this is the pertinent question - though to correct you, I did not 'think' I had all that cover - I 'did' have all that cover. My view is that I had been unduly influenced to buy the MPPI. Taking all our coverage into account, the bank still persisted to sell me MPPI.

Now the bank might decline my complaint on the basis that I was fully aware of my situation and I signed up for MPPI regardless.

I know my case is not as clear cut as someone getting a CC and being induced to take out PPI when say, a pre existing condition meant the insurance would not pay out in any case. Equally the bank had an obligation to ensure that the product sold was correct and fit for purpose.

magpiecottage wrote: »

There are no non risk situations in this world. There are degrees of risk, there are different types of risk but there is always risk.

Yes - that is correct. The laws of probability being between 0 and 1. Insurance is based on the laws of probability and the whole essence of the mis-selling saga.

magpiecottage wrote: »

Because we do not know how much her pension would have been if she had been made redundant, we have insufficient information to know.

A quick calculation would reveal that if she, or I, had been made redundant in the year we took out the policy we would have had about 12 months take home pay each in redundancy pay. She would have had her pension in addition to that.

dunstonh

but this is where your assertion becomes a little nonsense. Surely nobody can protect themselves for 15 years.

It is possible to cover illness that long but not redundancy. However, it would delay the eating in to personal savings allowing them to last longer and give the individual more time to find work.

if I have two years income to protect myself that would be more than adequate to either get another job, downside house etc etc.

I'm sure many of the long term unemployed felt the same way.

Now the bank might decline my complaint on the basis that I was fully aware of my situation and I signed up for MPPI regardless.

Probably wont use that as a reason. Unless the staff member noted it on file.

Equally the bank had an obligation to ensure that the product sold was correct and fit for purpose.

And with most MPPI, it is. The fit for purpose on a non-advised sale is whether it would pay out or not in the event of a claim. The answer would be yes in your case. An advised sale would greater requirements but most banks did these on non advised prior to 2005.

saver861

dunstonh wrote: »

It is possible to cover illness that long but not redundancy. However, it would delay the eating in to personal savings allowing them to last longer and give the individual more time to find work.

Yep - fully agree. We already had two such income protection polices that covered us to retirement age in the event of ongoing illness. Part of my reasoning we did not need MPPI!

dunstonh wrote: »

I'm sure many of the long term unemployed felt the same way.

Again, I would argue two years is more than sufficient to adjust to differing circumstances. Had I been made redundant and not got a job in two years then I should have adopted my circumstances accordingly.

dunstonh wrote: »

And with most MPPI, it is. The fit for purpose on a non-advised sale is whether it would pay out or not in the event of a claim. The answer would be yes in your case. An advised sale would greater requirements but most banks did these on non advised prior to 2005.

Is it not more than that? If it did not pay out then clearly it has to be either a mis-sale or the customer giving false information at the outset. Does it not also take into account existing coverage. If the customer is swayed into buying something they already have, is that entirely the fault of the customer? The sales tactics would be answerable I would suggest.

My MPPI was part of a Mortgage Sale. After some scampering around, I have now firmly established it was sold by the bank, Std Life, with my mortgage. We know that Mortgage is an advised sale so can the PPI section of it be separated somehow into a non-advised sub-section? Can't see how myself.

dunstonh

If it did not pay out then clearly it has to be either a mis-sale or the customer giving false information at the outset.

It could be that. It could be the person got sacked rather than made redundant. Not every refusal means it was mis-sold. Indeed, some mis-sale complaints where a claim was rejected have actually resulted in the claim being re-opened and paid out on as it wasnt the sale that was wrong but the claim handling by the insurer.

We know that Mortgage is an advised sale so can the PPI section of it be separated somehow into a non-advised sub-section?

An advised mortgage does not mean the insurance needs to be. The rules changed in Jan 2005 to tidy that up but prior to that it could be unclear. Sometimes it was little more than a tick box on the mortgage application form.

saver861

dunstonh wrote: »

It could be that. It could be the person got sacked rather than made redundant. Not every refusal means it was mis-sold.

No - indeed not. However, I'm referring to what it is intended to cover, i.e. compulsory redundancy should pay out, voluntary redundancy is not covered. Similarly, being sacked would not be covered as would self inflicted injury not be covered under the illness section.

However, my case is primarily about existing coverage rather than a failure to pay out. Indeed, I have a valid redundancy claim just waiting to go in if the complaint is not upheld!

dunstonh wrote: »

An advised mortgage does not mean the insurance needs to be. The rules changed in Jan 2005 to tidy that up but prior to that it could be unclear. Sometimes it was little more than a tick box on the mortgage application form.

No could be ... it certainly is unclear it seems! However, if I bought the Mortgage and the PPI at the same time with the same bank then presumably there must be part of the same transaction. If I go to Tescos and get milk and eggs and pay for them at the same time, it is down as one transaction I'm guessing.