Reclaiming Mortgage PPI

janpan1

My husband took out a mortgage in 1995 (before we were married). He was self employed at the time and still is. The mortgage is still running and as we are thinking of selling the property, he mentioned that he had been sold PPI. He was told he had to have the PPI if he wanted the mortgage.
We are going to have a look at the mortgage documents in detail, but my first instinct is that he may well have been mis-sold this product because he has a pre-existing medical condition which means eg he cannot get life insurance so I suspect he would not have been able to make use of the PPI even if he wanted to.

The PPI has cost approx £50 per month since 1995.

Any thoughts gratefully received.

antrobus

janpan1 wrote: »

.... but my first instinct is that he may well have been mis-sold this product because he has a pre-existing medical condition which means eg he cannot get life insurance ......

See104/1
http://www.financial-ombudsman.org.uk/publications/ombudsman-news/104/104-ppi.html

P.S. I suspect that when you say " he cannot get life insurance" you mean he can't get life insurance from a standard provider. There is a whole sector of the market catering for 'impaired lives'.

janpan1

Thanks for the link antrobus.

Re life insurance, I should have qualified my statement. He cannot get affordable life insurance. He looked at the 'impaired lives' sector first and the cost was still extremely prohibitive.

dunstonh

He was self employed at the time and still is.

Which is rarely an issue with MPPI.

He was told he had to have the PPI if he wanted the mortgage.

He may well have done in 1995 as that period had a lot of lenders offering special terms if you bought an insurance policy via them.

my first instinct is that he may well have been mis-sold this product because he has a pre-existing medical condition which means eg he cannot get life insurance so I suspect he would not have been able to make use of the PPI even if he wanted to.

Pre-existing conditions have to be something that would make a claim on any illness or accident unlikely. It does not make the policy unsuitable unless it eliminates too much coverage.

addedvaluebob

dunstonh wrote: »

Which is rarely an issue with MPPI.

He may well have done in 1995 as that period had a lot of lenders offering special terms if you bought an insurance policy via them.

Pre-existing conditions have to be something that would make a claim on any illness or accident unlikely. It does not make the policy unsuitable unless it eliminates too much coverage.

Being self employed can have a bearing depending on the terms and conditions of the policy. You cannot say this is 'rarely an issue' and dismiss a potential area of complaint because you know not the circumstances of his self employment or the T & Cs

Do you have statistical evidence of 'a lot'

The pre-existing condition again depends on the policy itself, I think the OP should definitely review all the documentation as they suggest and continue with the complaint, if they think it is valid.

dunstonh

Being self employed can have a bearing depending on the terms and conditions of the policy.

It can with some types of PPI. However, typically, you find MPPI suffers less on this front. It is more an issue with loan and credit card PPI.

The pre-existing condition again depends on the policy itself, I think the OP should definitely review all the documentation as they suggest and continue with the complaint, if they think it is valid.

How about checking with the insurer first before making a complaint?

janpan1

Thank you everyone for your input. We will bear it in mind as we go through the documents.

magpiecottage

There is also the question of who actually sold the policy.

Typically, in 1995 mortgages were arranged through estate agents or other brokers. They would recommend the mortgage and the insurances (even if the policy was through the lender). If that is the case then it is the seller, not the lender or insurer, you must complain to.

That would almost certainly be fruitless as they were not regulated in 1995.

So it very much depends who was responsible for the original sale as to whether your case even gets off the ground.

addedvaluebob

magpiecottage wrote: »

There is also the question of who actually sold the policy.

Typically, in 1995 mortgages were arranged through estate agents or other brokers. They would recommend the mortgage and the insurances (even if the policy was through the lender). If that is the case then it is the seller, not the lender or insurer, you must complain to.

That would almost certainly be fruitless as they were not regulated in 1995.

Back in 1995 a lot of mortgage brokers working in estate agents etc were tied to one insurance company as appointed reps. I think the OP should check this out as one of the first things before assuming the case is fruitless. There were a lot more appointed reps than independents

magpiecottage

addedvaluebob wrote: »

Back in 1995 a lot of mortgage brokers working in estate agents etc were tied to one insurance company as appointed reps. I think the OP should check this out as one of the first things before assuming the case is fruitless. There were a lot more appointed reps than independents

Unfortunately, this picture is incomplete.

In 1995, such mortgage brokers were appointed representatives of insurance companies offering life assurance pension and investment products because those products were subject to the Financial Services Act 1986 and the brokers chose this route to be able to sell them (particularly low cost endowments).

The insurance company was responsible for the sale of those products but anything else was entirely down to the broker, be it general insurance (including PPI), mortgages or televisions.

Even if they sold a PPI from a company within the same group as the life assurance company, responsibility rested with the broker.

If the policy was sold by somebody who was a salaried employee of the insurance company there might be a case to answer but not otherwise.

addedvaluebob

and if they had an agency to act on behalf of the company for general insurance this would also mean the company is responsible