Mis sold mortgage protection from a company who went bust.

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Hi everyone, I'm not new to the site but am new to registering and would like some advice.
Years ago I remortgaged and took out protection with it from a financial advisor who visited my home. I can't renember the company but will be able to when I get old bank statements out of the loft, I hope. I initially declined the protection because I told the advisor that my employer paid out sick pay of 100% of my wages for 6 months then 50% for 6 months. He said well you'll get double the money then if you ever have to claim and that would be a good thing. I reluctantly agreed and accepted the cover. When I eventually did get ill and needed to make a claim, I discovered that it didn't pay at if I was compensated by my employer! I think I cancelled the cover after this and thought no more about it. A while later I received a letter from someone, I don't have the letter anymore unfortunately, informing me the company had gone bust and did I want to make a claim against them for a loss of any kind. I filled in a form about my useless mortgage protection but was told that as I wasn't really out of pocket then I couldn't receive anything.
This was before the banks lost their fight against ppi claims. Do you think it is worth trying again? Any advice would be gratefully received.

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  • Nasqueron
    Nasqueron Posts: 9,044 Forumite
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    If you cancelled and complained in the past, you would potentially be time barred from complaining. Moreover, it is likely you misunderstood the MPPI, it would not pay out for the first couple of months as is written in the terms you read before signing but after that it would normally pay out on top.

    6 months full / 6 half pay is not a miss-sale reason with a massive long term debt like a mortgage when your home is at risk, after 6 months you would have all your bills to pay on 50% of your previous salary, few people could afford to live like that
  • Pinkrat
    Pinkrat Posts: 5 Forumite
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    Oh right ok. I don't think I misunderstood but thanks anyway. I didn't complain at the time, just when I received the letter from the other people informing me the company had gone bust. They accepted my reason and didn't think it was an incorrect reason, just that others that were trying to make claims were out of pocket more than me.
  • Pinkrat
    Pinkrat Posts: 5 Forumite
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    I was sick for 6 months and that was when I found out I couldn't make a claim.
  • dunstonh
    dunstonh Posts: 116,661 Forumite
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    I told the advisor that my employer paid out sick pay of 100% of my wages for 6 months then 50% for 6 months. He said well you'll get double the money then if you ever have to claim and that would be a good thing. I reluctantly agreed and accepted the cover.

    So, you were told what the position was correctly and you agreed to have it. So, no problems there. We know the FOS have no issues with MPPI when there is 12 months sick pay.
    When I eventually did get ill and needed to make a claim, I discovered that it didn't pay at if I was compensated by my employer!

    That doesnt make sense if it is MPPI. Mainstream MPPI pays out in addition to sick pay where there is a debt. If it was PHI, then it would as that does have a limit affected by employer pay. Some types of ASU are linked to employer pay but not those with mortgages.
    I filled in a form about my useless mortgage protection but was told that as I wasn't really out of pocket then I couldn't receive anything.

    As the firm no longer existed, then the complaint could not have gone to them. If this was a post Jan 2005 sale, then the FSCS come into play. So, it may have been them. It couldnt have been anyone else to be honest.
    This was before the banks lost their fight against ppi claims.

    Irrelevant. The banks were fighting the FCA in the courts because effectively the FCA wanted to retrospectively apply 2005 standards (when regulation of insurance started) to historic sales. The court case was about whether the FCA had the powers to do that. The courts ruled they did.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Pinkrat
    Pinkrat Posts: 5 Forumite
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    That doesnt make sense if it is MPPI. Mainstream MPPI pays out in addition to sick pay where there is a debt. If it was PHI, then it would as that does have a limit affected by employer pay. Some types of ASU are linked to employer pay but not those with mortgages.

    I cancelled it because I was told they would not pay out as well as my employer paying out. I took that as the truth, what would I know. That's why I assumed it had been mis sold as even when I got sick they wouldn't of paid out.


    As the firm no longer existed, then the complaint could not have gone to them. If this was a post Jan 2005 sale, then the FSCS come into play. So, it may have been them. It couldnt have been anyone else to be honest.

    I believe it was the FSCS





    Irrelevant. The banks were fighting the FCA in the courts because effectively the FCA wanted to retrospectively apply 2005 standards (when regulation of insurance started) to historic sales. The court case was about whether the FCA had the powers to do that. The courts ruled they did.[/QUOTE]

    I was just making sure you knew it wasn't a claim for ppi I had made. Just compensation from the company that had gone under. I didn't ask for the letter from FSCS
  • Pinkrat
    Pinkrat Posts: 5 Forumite
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    I know my post is pretty much dead now but I've just been on success and failures thread and there is a person on there who was refused a payment from a company because he was receiving full pay from his employer when he became ill. So I'm not going mad.
  • dunstonh
    dunstonh Posts: 116,661 Forumite
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    Pinkrat wrote: »
    I know my post is pretty much dead now but I've just been on success and failures thread and there is a person on there who was refused a payment from a company because he was receiving full pay from his employer when he became ill. So I'm not going mad.

    That is normal on most loan and credit card PPI. It is not normal on MPPI. It is normal on PHI.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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