Wrongly sold ppi instead of life insurance

Mushy21red

My stepfather passed away last year and when we rang the woolwich with who his mortgage was paid to we asked about his life cover to pay off the mortgage to our surprise we were told he didn't have any cover he was paying the £80 a month for credit card cover. Which they paid off his barclaycard of £ 500. My mother has been left with the mortgage which she is adamant they told them they had the house covered in event of either of them passing away. Is there anything I can do about this? Sorry if this is a bit confusing it's my first time on here

dunstonh

My mother has been left with the mortgage which she is adamant they told them they had the house covered in event of either of them passing away. Is there anything I can do about this?

This is a difficult situation for your mother. However, it all depends on the evidence she has available.

Does she have anything to suggest a life assurance policy existed or applied for?

There has been no mandatory requirement with most lenders since the 90s to have life assurance. Indeed, many banks didnt let their mortgage staff sell it (instead requiring another adviser to do it who held the authorisations).

if there is no evidence of life assurance ever existing or being applied for then a complaint is not going to succeed.

addedvaluebob

1. Go through all your fathers paperwork
2. Check bank statements for monthly premiums to any insurance company going back as far as you can
3. Put in a SAR for all the original paperwork from the mortgage to see if a policy was mentioned
4. Check original paperwork to see who advised them on the mortgage and if there was no policy to pay out in the event of death you may have grounds to raise a complaint that the adviser failed to adequately consider your parents circumstances when arranging the mortgage. It may well depend on the status of the adviser so could be a long shot but worth investigating/following up

-taff

Was it a joint mortgage? Did he own the house in his name only? Did your mother think the PPI was life cover for both of them?
What did the 80 cover because that's an awful lot of cover just for a 500 credit card.
Did you get yearly renewal on this PPI?

Mushy21red

They remortgaged about 7 years ago and where told they would still be covered that's why they never questioned the money coming out of their account. I couldn't believe they where paying that amount of money out.

Mushy21red

Yes it was a joint mortgage. When I rang them they just said it was credit card insurance and they would pay off the barclaycard. My parents thought it was the life assurance because it was paid to the same company as the mortgage which I also thought. They never received anything from them.

dunstonh

My parents thought it was the life assurance because it was paid to the same company as the mortgage which I also thought.

The life assurance would have been to a different company in most cases. I cant remember who woolwich used. Standard Life I think.

magpiecottage

dunstonh wrote: »

The life assurance would have been to a different company in most cases. I cant remember who woolwich used. Standard Life I think.

Woolwich was first independent, then tied to Sun Alliance, then launched Woolwich Life - a joint venture with Sun Alliance - then taken over by Barclays.

However it is possible that such a policy was sold by an independent broker.

Woolwich, along with most building societies, never recorded details of life policies for repayment mortgages. In the early 1990s they even stopped recording details of endowment policies.

It is also possible that a policy once existed but has now lapsed.

A complaint that the adviser did not consider the need for life cover is unlikely to succeed. Under the FCA's mortgage rules, there was never a requirement to do this, so you would be reliant on it being sold under the Mortgage Code (between mid 1997 and 30 October 2004) and the firm that actually sold the mortgage still being around to face the complaint.

Whilst this sounds harsh and it is worth investigating, be aware that the evidence suggests you will not be successful.

addedvaluebob is right to suggest looking through bank statements to see if premiums are being paid to anybody else, though. That seems to be your best chance.

addedvaluebob

magpiecottage wrote: »

A complaint that the adviser did not consider the need for life cover is unlikely to succeed. Under the FCA's mortgage rules, there was never a requirement to do this.

It all depends on the status of the mortgage adviser and in 2004 they were just as likely to be seen by a financial adviser in which case the rules regarding mortgage selling do not apply and the advising company is responsible for giving best advice including the consideration of mortgage protection

magpiecottage

addedvaluebob wrote: »

It all depends on the status of the mortgage adviser and in 2004 they were just as likely to be seen by a financial adviser in which case the rules regarding mortgage selling do not apply and the advising company is responsible for giving best advice including the consideration of mortgage protection

I am not sure where to begin to highlight the ignorance shown in that statement.

Lets begin with the obvious point that the OP says the cover turned out to be PPI for a credit card provided by a lender that also happened to have a mortgage with them.

No financial adviser ever sells PPI for a credit card - it is an add on to the card account itself. So it is simply not credible that addedvaluebob's suggestion could be true.

It is also not clear what addedvaluebob means by "financial adviser". However, the generally accepted view at the time was a person who was authorised to give advice regulated by the Financial Services and Markets Act 2000. Until 30 October 2004, that meant only investments or products capable of being converted into investment products. It did not include simple term assurance policies which pay out during the "term" of the policy but not otherwise. Term assurance is the type used for repayment mortgages because you know if you die before the end of the mortgage term there is a loan to pay off but it is cleared by the end.
Nor did it include mortgages.

On 31 October 2004, mortgage regulation came into force and finally, on 15 January 2005, general insurance regulation came into force.

So, in 2004, there was no statutory regulation of life cover of the type needed for repayment mortgages. There was a voluntary code in respect of general insurance but this only included short term insurance. This includes PPI (which is technically an annual contract and the lender can change the terms on which it is offered on renewal) but NOT term assurance.

So, what addedvaluebob is suggesting is that a financial adviser for some reason sold a product relating to his customers credit card (on which he would earn no commission) instead of covering his mortgage (for which the adviser would have earned commission) and thus breached non-existent regulations.

In addition, the FSA rules only required an adviser to ensure he had good reason to ensure a product he recommended was suitable - not that he recommended every suitable product. That is still the case.


There is a small possibility that the mortgage was sold under the Mortgage Code. If so, that did require an adviser to explain the available insurance products - so if it can be shown that this was not done, you MIGHT have a valid complaint but FOS may not be able to look at it.

flea72

If they remortgaged , isnt it likely the policy they had running alongside the previous mortgage is still in place?