Abbey Mortgage PPI

frazell

A bit late to this PPI stuff and didn't realise that mortgage PPI was reclaimable.


In 2000 I took out a mortgage with Abbey for £89k as a first time buyer, this was in the good old days when you sat with an advisor in branch.


At the time I was a sole trading freelancer for just over a year prior to me taking the mortgage. The mortgage advisor was concerned about my limited time trading and I had to get a letter from my client at the time confirming my contract details, e.g. duration, rate etc.


The advisor was particularly insistent on me taking out mortgage PPI to cover me for illness and unemployment. I remember that I argued that I didn't need it at the time but she said that the application would fail without it in place. I therefore (begrudgingly) took the policy.


I've just written to Santander and they came back saying that I was employed at the time, which they based on some paperwork from 2003, so I've corrected them on that. I also provided the letter I had from my client at the time to prove I was self employed.


I also stated in my initial complaint that I had an ISA worth £3500 which would have covered me if I was unable to work which they said would not be useful to me as these products have penalties attached (beg to differ, but hey).


Given that, I went through all of my bank statements and savings and proved to them that I had about £17.5k of readily accessible cash (outside of ISA) and that was the reason why I didn't need the PPI at the time.


They are still thinking about my last reply but assuming that they will not uphold the complaint I wondered, considering the timeframes involved whether a complaint now to the FoS would be time barred on the 6, 3 year rule?


Any advice gratefully received.

Stumbles66

I too, took a mortgage out in 1993 at the Abbey National and attended a branch. I received a mortgage in principal before finding a property and having an offer accepted. I returned to the branch to complete my application and sign the paperwork. At that meeting I was taken through the payments and in addition to the mortfgage payments, there were payments set out on the form for:

• Home insurance
• Mortgage indemnity
• Payment protection

I questioned these but was told that the indemnity payment was because of the loan taken compared to the value of the property and I had to pay this to protect Abbey. I was also told I had to take the home insurance and the payment protection if I wanted the mortgage to go through. As this was my first mortgage and still being fairly young I felt I had no option and just assumed that this was the way banks offered mortgages (there was no Google to ask those days!). I was also employed in a job that was unlikely to make redundancies and would pay for sickness absence so felt it was unlikely that I needed this protection.
It was only recently that I was reading MSE and realised that I possibly had a case so put a complaint in and my complaint was upheld within about four weeks, with my payments paid to date returned together with over £8000 in compensation. Good luck.

dunstonh

I also stated in my initial complaint that I had an ISA worth £3500 which would have covered me if I was unable to work which they said would not be useful to me as these products have penalties attached (beg to differ, but hey).

Also, £3500 is barely worth the effort in respect of an emergency fund. Typically you are looking at 1-2 years income being required before you can really use that as a justifiable complaint reason.

Given that, I went through all of my bank statements and savings and proved to them that I had about £17.5k of readily accessible cash (outside of ISA) and that was the reason why I didn't need the PPI at the time.

Might be good enough for loan or credit card PPI but for MPPI, that is not really a justifiable reason. The FOS have generally agree with the lender when there are small amounts of cash involved.

They are still thinking about my last reply but assuming that they will not uphold the complaint I wondered, considering the timeframes involved whether a complaint now to the FoS would be time barred on the 6, 3 year rule?

If you were timebarred, Santander would have told you.

Banks are inconsistent with their complaint handling. Generally, most MPPi complaints fail (including at the FOS). It is more important to have than other types of PPI. Indeed, MPPi is still retailed today. So, you do tend to find greater scrutiny is put onto complaints and things that can work for short term unsecured debts may not work for long term secured debts with lifestyle changing consequences if they go unpaid.

Most MPPI covers self employed for example.Whereas loan and credit card PPI often does not or has onerous conditions. Even with jobs with 12 months sick pay have seen the FOS reject complaints on MPPI.

So, by all means continue the process but just be aware that things are not as easy when it comes to MPPI.

frazell

Thanks for your comments both, and good to know that someone else has had some success on this.


With respect to Dunstonh's comments;


I think this is a genuine case of miss-selling especially where you are led to believe that the policy is required to attain a mortgage and then argued by Santander that it was optional. The paperwork and policy documents were posted to me after the policy was taken out which I believe is not above board either.


With respect to the monies that I had available to me. I was 24 and had very few outgoings at the time. The mortgage payments were something like £460pcm so £3500 would have paid the mortgage for +6months should the worst happen to me, I cannot really agree that its an insignificant amount.


Again with the total of £17.5k at my disposal I could have paid the mortgage for +36months should I be unable to work which gives enough time to sell the property to repay the mortgage. I genuinely did not want this policy and did argue that fact at the time. I cant believe that having this money at my disposal would be discounted from an argument if I'm honest?


With regard to time bar issues, would Santander have used this as a get out from the off? All I'm concerned about is taking this further to the FoS and them being unable to help due to timescales. That would leave me with a small claim to try to obtain redress.


I fully agree that these policies still exist today, but they are clearly spelt out as an optional product and not used as leverage against customers applying for mortgages.

frazell

Stumbles66 wrote: »

......so put a complaint in and my complaint was upheld within about four weeks, with my payments paid to date returned together with over £8000 in compensation.

Out of interest, was your complaint upheld by Santander or via the FoS?

dunstonh

I think this is a genuine case of miss-selling especially where you are led to believe that the policy is required to attain a mortgage and then argued by Santander that it was optional. The paperwork and policy documents were posted to me after the policy was taken out which I believe is not above board either.

in which case, provide the evidence to back up that allegation and you win.

With respect to the monies that I had available to me. I was 24 and had very few outgoings at the time. The mortgage payments were something like £460pcm so £3500 would have paid the mortgage for +6months should the worst happen to me, I cannot really agree that its an insignificant amount.

6 months of a 25 year contract. So, nothing near adequate.

Again with the total of £17.5k at my disposal I could have paid the mortgage for +36months should I be unable to work which gives enough time to sell the property to repay the mortgage. I genuinely did not want this policy and did argue that fact at the time. I cant believe that having this money at my disposal would be discounted from an argument if I'm honest?

Its not just mortgage costs. It is all bills that would need to be covered.

With regard to time bar issues, would Santander have used this as a get out from the off? All I'm concerned about is taking this further to the FoS and them being unable to help due to timescales. That would leave me with a small claim to try to obtain redress.

The FOS dont create the timebar. The provider does. So, if santander were to enforce it, they would have said so and not considered any part of your complaint.

frazell

Thanks for your comments Dunstonh.

dunstonh wrote: »

The FOS dont create the timebar. The provider does. So, if santander were to enforce it, they would have said so and not considered any part of your complaint.

That's not the recent experience that I've had with a complaint to Santander/FoS regarding the Cap Margin Increase on their mortgage product from 2008.


In that instance Santander had agreed that I was due redress but the FoS refused to assist with resolving the complaint as it was outside of their 3,6 year rule.


I'm not sure if Mortgage complaints and PPI complaints have different time constraints though.

dunstonh

That's not the recent experience that I've had with a complaint to Santander/FoS regarding the Cap Margin Increase on their mortgage product from 2008.


In that instance Santander had agreed that I was due redress but the FoS refused to assist with resolving the complaint as it was outside of their 3,6 year rule.


I'm not sure if Mortgage complaints and PPI complaints have different time constraints though.

That has to be a mistake. If a firm volunteers to review a complaint and not apply the timebar then you have access to the FOS. if they apply the timebar then the FOS cant review it. What may happen is that a firm may not decide to review the complaint as it is timebarred but offer a goodwill gesture. That way they can prevent access to the FOS. Or, if the area being complained about occurred prior to regulation and was not covered by an earlier body. The bank would have to volunteer the FOS to look at it.

The letter you get from the bank telling you the outcome of your complaint tells you the rights of access to the FOS.

frazell

I wish it was a mistake.


With specific respect to that complaint (Cap Margin), Santander did provide detail on how to complain to the FoS which I duly did.


The FoS responded referencing this;


http://www.financial-ombudsman.org.uk/faq/businesses/answers/before_we_get_involved_a7.html


As the "event" occurring in 2008 then this put my complaint outside of the 6 year rule.


The FoS then said that I "ought" to have been aware of the problem with my mortgage Cap Margin in 2010 when it went SVR and therefore placed out outside of their 3 year rule.


Importantly, and if applying the same to my PPI claim the FoS would say that as the mortgage PPI was taken out in 2000 then it is now outside of the 6 year rule.


As for the 3 year rule, the FoS might say that I "ought" to have been aware that I had a case in 2011 when this whole PPI thing blew up in the press.


This is the basis of my confusion really given the FoS time constraints, how and why they are assisting all of these historic PPI complaints outside of the 3, 6years.


I assume its in the FoS wording which states that if the Bank agrees to the complaint being taken to the FoS then the complainant can do so. I need to check the wording carefully in respect to the FoS response.

Stumbles66

Not sure if it helps but one of the points that the MSE site mentioned was that it was acceptable for mortgage providers to insist that mortgage protection was in place but what they could not do was insist that you took their policy. I included this point within my complaint, that I wasn't able to shop around for a cheaper policy.

frazell

Stumbles66 wrote: »

Not sure if it helps but one of the points that the MSE site mentioned was that it was acceptable for mortgage providers to insist that mortgage protection was in place but what they could not do was insist that you took their policy. I included this point within my complaint, that I wasn't able to shop around for a cheaper policy.

Thats really useful thanks.