Plevin rejected - can a further claim for mis-selling be made?

Hamish9

I initially submitted a complaint under Plevin which went to the FOS and was rejected because the mortgage taken out in 1997 was changed before 2007, although both were covered by the same MPPI policy. So while I do not understand how the fact that I changed mortgages alters the principle that an unfair relationship had been created, the Ombudsman did not uphold the complaint.

It was only in the course of this process that I moved toward the view that I had, after all, actually been mis-sold this product. Not least because I only later become aware of the additional benefit that the mortgage company may have been receiving through the profit share arrangement with the Insurance Company ie on top of an outrageously high level of commission.

My question is whether I am now able to submit a claim against the mortgage company for mis-selling this policy or, because I have already had a Plevin claim rejected, will any further claim also be rejected?

SonOf

I initially submitted a complaint under Plevin which went to the FOS and was rejected because the mortgage taken out in 1997 was changed before 2007, although both were covered by the same MPPI policy.

People normally go to the FOS when they disagree with the outcome. Rejecting plevin is clearly the right outcome here. Its not a grey issue but black and white. It didnt need the FOS involved.

So while I do not understand how the fact that I changed mortgages alters the principle that an unfair relationship had been created, the Ombudsman did not uphold the complaint.

Commission disclosure was and still is not required under FCA regulations. However, a change in S140 of the consumer credit act in 2006 (effective 2008) required commission disclosure. Basically, no-one picked that up. Not even the regulator until the court case ruling.

So, if a policy is bought at the same time as the debt and the debt is regulated under the CCA (which most mortgages were not until 2008) and the debt and policy was still running in 2008 then they have to consider Plevin.

We dont have enough detail to say exactly why yours may not be in scope but possibilities are
1 - ceased before 2008
2 - The 2007 remortgage broke the link to the MPPI under the consumer credit act. So, it never fell under the CCA.
3 - The mortgage was covered under MCOB until 2008. So, the 1997-2007 mortgage never fell under the CCA. The new one after 2007 would be under the CCA but that mortgage and MPPI were not bought at the same time.

It was only in the course of this process that I moved toward the view that I had, after all, actually been mis-sold this product. Not least because I only later become aware of the additional benefit that the mortgage company may have been receiving through the profit share arrangement with the Insurance Company ie on top of an outrageously high level of commission.

MPPI commission is not outrageously high. Indeed, without the profit share, MPPI commission is below the tipping point. It is only the profitshare that takes it over the tipping point. The banks were rather unlucky to have profitshare included as the agreement with the insurers was they shared the gains and the losses. It was business risk that in effect saw the banks part underwrite the policy. Plans sold by mortgage brokers dont use profitshare. So, the insurer gets 100% of the gain (or loss). However, that is not included in the plevin redress. So, its an anomoly that consumers using banks benefitted from rather than being outrageous.

My question is whether I am now able to submit a claim against the mortgage company for mis-selling this policy or, because I have already had a Plevin claim rejected, will any further claim also be rejected?

When you made your complaint and got your response, did they state that it was only being considered under Plevin or did they treat it a normal PPI complaint?

Hamish9

Many thanks for your comprehensive reply and can confirm that the complaint was only considered under Plevin

SonOf

In which case, you should be free to complain about missale now as its not the same thing.

However, don't be confident. The majority of MPPI complaints fail. Not trying to put you off but just preparing you for the statically likely outcome.

You can see from the variations that apply under Plevin that its not always as straightfoward as this site/Martin makes out. A made up guess percentage is that what you read in simple guides covers around 80% of cases. You fell in that 20% where things are not as clear cut.

Hamish9

Appreciate your advice, thanks