Northern Rock / Legal & General MPPI

Spork

Hi All

We're going round the houses a bit with our MPPI claim. For our previous mortgage in 2004 we used NR who told us we had to take out MPPI as a condition of the mortgage. Legal & General provided the MPPI and all our payments went to them.

It turns out that we would not have been able to make any claim if needed to as we were self-employed.

Firstly we tried to claim from L&G but as they didn't actually give us the condition they rejected it. So we went to NR who have just rejected it because they can't find a record of us with Cardiff Pinnacle(?) even though we told them L&G administered the MPPI.

So not sure where to go now - any advice?

Bermonia

Firstly was it Northern Rock or a mortgage broker that you took your mortgage with - if a broker then your complaint would need to be directed at them, however given date of sale likely to be unregulated.

If you are certain that it was Northern Rock then supply them with as much information/evidence you can to enable them to locate the policy.

I would also recommend reading carefully the terms of your policy as it is a common misconception that PPI didn’t cover those who were self-employed as many polices did.

antrobus

Spork wrote: »

...

It turns out that we would not have been able to make any claim if needed to as we were self-employed....

Are you sure about that?

Spork wrote: »

...
Firstly we tried to claim from L&G but as they didn't actually give us the condition they rejected it. So we went to NR who have just rejected it because they can't find a record of us with Cardiff Pinnacle(?) even though we told them L&G administered the MPPI.

...

Looks to me like NR used Cardif Pinnacle. Since you have a L&G policy it would imply you used a broker.

dunstonh

It turns out that we would not have been able to make any claim if needed to as we were self-employed.

What makes you think that? Most MPPI does cover the self employed with no issues.

Firstly we tried to claim from L&G but as they didn't actually give us the condition they rejected it.

As L&G didnt sell it to you, they have no liability for the complaint.

So we went to NR who have just rejected it because they can't find a record of us with Cardiff Pinnacle(?) even though we told them L&G administered the MPPI.

Are you sure the L&G policy was MPPI? NR used Cardiff Pinnacle for their MPPI and L&G was used for life assurance and critical illness cover.

antrobus

P.S.

I can't say what the T&Cs where in 2004, but the current key features for L&G MPPI clearly state "you are working for at least 16 hours a week within the UK, ChannelIslands or Isle of Man; on an employed or a self employed basis".

https://www.legalandgeneral.com/_resources/pdfs/insurance/mppi_keyfeatures.pdf

5 seconds on Google.

[Deleted User]

Spork wrote: »

It turns out that we would not have been able to make any claim if needed to as we were self-employed.

Mortgage PPI did usually cover the self employed, only if the conditions were too onerous would the policy be considered mis-sold.

To be honest, this sounds like a broker-sold policy and pre-regulation.

Spork

Hi

Thanks for the answers - does it make no difference if we didn't know we could refuse MPPI? We got this through a broker who put us on the phone to NR who said we had to have MPPI. What's pre-regulation?

dunstonh

does it make no difference if we didn't know we could refuse MPPI?

Only if you have evidence to support your allegation. You almost certainly do not.

We got this through a broker who put us on the phone to NR who said we had to have MPPI. What's pre-regulation?

This is vital information and changes everything.

The broker sold it to you. So, the broker is liable for the complaint. Not the lender. Not the insurer. You should have made your complaint to the broker.

HOWEVER, there is no point. Brokers only became regulated in January 2005. So, they do not need to act on complaints made about sales prior to January 2005. That is pre-regulation.

Also, a lot of mortgage brokers have a requirement to purchase insurance from them to get the free mortgage advice and set up. That model is allowed as long as the insurance is suitable.

The uphold rate on MPPI sales by mortgage brokers on post regulation sales (i.e. those after 14th Jan 2005) floats between 5% and 16%. And for context, if you put the big mortgage brokers together (which accounts for over half of all UK mortgages put in place) and look at their total number of PPI complaints with the FOS, they all have under 30 PPI complaints at the FOS in each reporting period. The PPI issue is not considered to be a broker/adviser failing. It is mainly the banks and credit card companies. So, even if yours was post regulation, you wouldnt expect success statistically.

Spork

Thanks - I'm still confused though. It was Northern Rock who told us we had to have the MPPI, not the broker. I don't understand why the broker would be liable for NR's condition.

[Deleted User]

Spork wrote: »

I don't understand why the broker would be liable

The broker sold you the insurance.

dunstonh

It was Northern Rock who told us we had to have the MPPI, not the broker.

Doesn't matter. The firm that sells the product has liability.

If the broker has it on file that NR insisted on insurance then they can't have missold it. I'm an IFA. If I am dealing with a firm that says they need something or I need to know the terms of a product, I have to have documentary evidence to show that. I go back to the days when insurances were compulsory and we used to keep the documentary evidence from the lender to support our recommendation. If the lender said it was needed, then you cant be missold.

As you did not buy an NR product, NR have no liability for complaint.

All of this is irrelevant though. The overriding issue is that you bought before insurance was regulated and brokers were not members of an earlier body (unlike banks). So, even if you were missold, it doesnt matter. It's game over.