Santander (was N&P then Abbey) Mortgage Help?

H&C

"However, we are talking about (MPPI) one of the good types of PPI"
PPI and MPPI are neither good products nor bad products, it always depends on the consumer's circumstances and whether or not the product was suitable for their needs at the point of sale. PPI (and MPPI) is a niche product, sold to the mass-market product. Unfortunately PPI and MPPI was sold to generate massive profits for the providers with little or no concern about the consumer. If the products (PPI & MPPI) were sold correctly, banks would never have had to repay the billions back in compensation to consumers. It's unfortunate that the banks have also tried to deny consumers fair outcomes when the complaint has been mis-sold, which is why so many cases are upheld at the Financial Ombudsman Service (FOS) and many more cannot be bothered to take it any further...this is also a scandal.If banks and other financial institutions treated consumer's complaints fairly, the uphold rate at the FOS would be very small, unfortunately it is not.

However, assessing suitability isn't hard to do, if the advisers understand the product and they ask the consumer the correct questions. PPI was sold because staff had to hit their sales targets (or to keep their jobs), to gain promotion or simply for the incentives that the banks put in place. Although Lloyds Bank were fined £28M for this (see the FCA webpage "FCA fines Lloyds Banking Group firms a total of £28,038,800 for serious sales incentive failings"), this was commonplace throughout the industry, not just at Lloyds Bank. This has no place in selling financial products. PRIN 2.1.1 (Principle 6) states that "A firm must pay due regard to the interests of its customers and treat them fairly." Unfortunately they had no "regard to the interests of its customers", only the interests of the bank or financial institution. And Principle 9 states "A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment". FCA Principles are Rules, not just general statements of what firms should do.

dunstonh

PPI and MPPI are neither good products nor bad products,

That is not really the case though is it. Loan PPI, for example, because of the of the way it was structured and the amount it cost vs the benefit in most cases means that most loan PPI was considered missold. You cannot buy loan PPI today. Whereas most regular premium standalone PPI/MPPI complaints fail. You can still buy those today.

Complaints are frequently upheld on loan PPI for structural reasons (i.e. product failings). Whereas you rarely see that on MPPI (single premium, for example, is nearly always considered bad. Nationwide were rare on not covering self-employed whereas most MPPI does, without onerous clauses).

There is no argument over why or how the bank clerks over sold it.

H&C

This is my last post on the issue of MPPI mis-selling...

The following is an extract from Ombudsman News issue 118 (July 2014):
"We (the FOS) receive complaints from consumers who say they were told MPPI was compulsory - and are now questioning whether they were misled. We know that some businesses used to make taking out MPPI a condition of approving certain mortgage applications - for example, where the “loan to income ratio” (the size of the mortgage in relation to the borrower’s income) was high.

Businesses were allowed to do this - so we won’t automatically decide that the policy was mis-sold. But we will check that the consumer could benefit from the policy in the event of a claim. We will also consider whether the situation was clearly explained to the consumer - so that they could make an informed choice about whether the overall offer was right for them.

If we find shortcomings in the way an MPPI policy was sold - and decide that the consumer wouldn’t have taken it out if they had received better advice or information - we generally tell the business to put the consumer in the position they would be in if they hadn’t been sold the policy. This often involves a refund of the premiums with interest. Where limited records exist, we will make our decision on the balance of probabilities."

Partridge89

Is that not what dunstonh was saying, that the PPI can!!!8217;t be deemed mis-sold solely for the reason that it was compulsory as long as it was actually compulsory?

H&C

Sorry - but what was said was "If it was a condition of borrowing, you cannot be missold". Clearly the FOS do not say that.

[Deleted User]

H&C wrote: »

Sorry - but what was said was "If it was a condition of borrowing, you cannot be missold". Clearly the FOS do not say that.

I thought you said your last post on this issue was post #14?:)

dunstonh

Ok, I shortened my usual response from that on other threads by leaving out that the insurance still needs to be suitable. However, the fact is that if they say it was a condition of borrowing, then you are likely to be on a hiding for nothing.