PPI on a mortgage

TPD

Hello
I wondered if anyone has any advice on claiming PPI back on a mortgage?
I am pretty sure my parents deal was missed to them but not sure how to go about looking into it myself and don't want to go via a company as i know you can do it yourself for credit cards etc.

Thanks in advance!

TPD

*Missold to them - apologies for typo

dunstonh

I wondered if anyone has any advice on claiming PPI back on a mortgage?

First thing to remember is that most MPPI complaints fail. And the FOS reject most of them too (unlike loan and credit card PPI). MPPI doesnt suffer the same degree of issues as loan and credit card PPI. Indeed, MPPI can still be bought today.

One of the reasons is that most MPPI is regular monthly premium standalone from the debt (i.e. it has its own direct debit). That is how PPI should be set up. If that is the case for you then you know the product is not a problem (unlike loans where it is front loaded and charged interest on).

Most mortgages in the UK are put in place using mortgage brokers/advisers. They only became regulated in January 2005. So, if your parents used one and its from before that date, its pre-regulation. Also, broker/adviser PPI complaints are unusual. Less than 1% of PPI complaints. Most are set up correctly and result in rejection. Either because it is pre-regulation or it was done correctly. Its really only single premium MPPI that is the real issue there.

If they used a bank, the Jan 2005 date does not apply. However, again, most banks MPPI product was monthly premium, standalone direct debit. Not as good value as a brokers product but price is not a reason for complaint. Some were not as good quality as a brokers product (for example broker ones nearly universally cover the self employed. Some bank ones dont). Quality is only an issue if it prevents a claim on the policy.

Banks are a bit more scattegun on their complaint responses. However, we are seeing more bank MPPI complaints fail as the handling process is mature now and the FOS outcomes are known. For example, they now know the FOS wont upold a complaint on employer sick pay for 12 months with MPPI whereas they were more likely to with PPI.

Some lenders had mortgage deals that required the purchase of MPPI as a cross subsidy deal. That was allowed as long as the insurance was suitable. i.e. if they said they had to have it to get the mortgage deal then that is not a complaint reason if it was the case.

What are you parent's reasons for complaint?

TPD

Thank you so much dunstonh - really really helpful.

Well - to be honest they haven't complained, its me looking into my own and just thought I should look into theirs too - they bought in 1997 - used a broker to get the mortgage with a building society. They don't pay a separate payment monthly (to my knowledge) so they probably don't have PPI in this case.

My reason for suspecting they did is just because the whole mortgage was done with this broker who I know got a hefty commission and sold them a useless life insurance policy - they are old now and not looking into changing things but I know they are on a standard variable rate so wanted to see if theres a way of helping them either lower their payments or just make them financially better off over the 5+ years they have left paying it.

dunstonh

they bought in 1997 - used a broker to get the mortgage with a building society. They don't pay a separate payment monthly (to my knowledge) so they probably don't have PPI in this case.

Its game over even if they had it. Pre-regulation.

My reason for suspecting they did is just because the whole mortgage was done with this broker who I know got a hefty commission and sold them a useless life insurance policy

To be fair most people take out life assurance to cover their mortgage. If the broker was whole of market for insurance, the price should be good. If it was a tied agent of an insurer, it will be more expensive.

Also pricing in 1997 is higher than today. So, it may not be useless. It may just be an old product that needs bringing upto date.

TPD

Thank you for your response.

Dunstonh - can i Please ask your advice - there are about 5/6 years left on their mortgage, and they are now quite old - the interest is quite high and they have never changed the mortgage in all the years they had it (since 1997) - is it worth looking into another offer or a) are they too old b) shall they just continue as they have paying it

dunstonh

If they are still working, then another deal with another lender is possible. If they are not working, then the existing lender may offer a rate switch. If its a struggle, then they could consider equity release (some equity release plans allow repayment should they choose to do so.

TPD

thank you again -

dunstonh - regarding what you mentioned about the regulation changes, theres an ad online saying you can check PPI if you got a mortgage between 1988-2011. I can't post the link here due to MSE rules unfortunately.

Wanted to ask is this just a scam?

thanks

dunstonh

dunstonh - regarding what you mentioned about the regulation changes, theres an ad online saying you can check PPI if you got a mortgage between 1988-2011. I can't post the link here due to MSE rules unfortunately.

That date range is just made up.

Financial services regulation started in 1988. So, that is probably where they got 1988 from. However, banks and building societies volunteered back in the 80s to consider complaints from before regulation. So, if you had a 1987 policy sold by a bank, you can still complain. So, the 1988 bit is a red herring.

Insurance regulation started in January 2005. However, banks and building societies and some insurers were members of an earlier body. They have to consider pre-regulation complaints. Brokers/advisers were rarely a member of an earlier body and do not have to consider pre-regulation complaints.

I havent a clue where the 2011 date comes from. I guess they are using that as most lenders had pulled out of PPI by then. However, MPPI is still available today. So, when referencing that year with mortgages, it doesn't make any sense. However, most adviser/broker sold insurance was not missold. Some CMCs refuse to put in complaints against brokers/advisers because they know they are likely to have the better audit trail and would be using standalone cover of a higher quality. Brokers/advisers tend to take complaints personally too and fight them harder. Banks roll over more easily and even auto payout at times.

A lot of claims companies talk BS. They lie to get people signed up as the callers are on commission and have targets to get people signed up. Ironically, doing all the things they complain the banks were doing. However, they also have a limited space in an ad. They cant cover all the caveats and distribution channels. So, they just pick two extremes on the dates and go with that.

TPD

Thank you -

really interesting - the reason I ask is I keep seeing this ad pop up and each time it makes me think we should check - but really good to know some facts there. More people should know this and surely these PPI claim companies should be regulated.

I imagine if there was a successful claim they would get a high percentage...

thank you for your information and knowledge on this.

best wishes

[Deleted User]

TPD wrote: »

surely these PPI claim companies should be regulated.

They are, but very loosely. There are also many who flout the rules..

TPD wrote: »

I imagine if there was a successful claim they would get a high percentage...

Around a third of any redress is charged in fees (along with VAT).