Mortgage PPI Claims
What Is Mortgage PPI?
Over the last couple of decades, lenders have sold mortgage payment protection insurance (MPPI) to many people. The policy would help safeguard your mortgage repayments if you became unemployed or were out of work due to an accident or sickness.
However, MPPI was widely mis-sold by banks and other lenders but also by brokers, to many people, the majority of which did not know they had the policy.
Mortgage PPI Costs & Charges
If you have a mortgage / remortgage or have had them in the past, it is worth looking back through any paperwork you may have to see if you paid PPI without knowing. It is possible that you may have been sold MPPI or it was added without your knowledge.
MPPI is usually charged on a monthly basis and is paid on top of the monthly mortgage payment charge.
This side of claiming back PPI is often overlooked but is just as important if you think about the amount the sums of money involved when taking out a mortgage.
Lenders Who Sold PPI on Mortgages
The following list of high street lenders are known to have mis-sold MPPI on their mortgage products:
- Bank of Scotland
- Cheltenham & Gloucester
- Co-operative Bank
- Clydesdale Bank
- First Direct
- Halifax Bank
- Lloyds Bank
- Lloyds TSB
- Midland Bank
- NRAM (Northern Rock)
- Nationwide Building Society
- Royal Bank of Scotland
- Yorkshire Bank
- Yorkshire Building Society
This is not a complete list of lenders that sold MPPI with a mortgage product, please look at the lender pages for a lender or provider that doesn’t appear above.
How was Mortgage PPI mis-sold?
MPPI was widely mis-sold or added to mortgages usually without the customers consent or knowledge at the point of sale. Much of the time the PPI seller did not carry out any checks to see if the customer met the terms and conditions of the insurance or if they needed or in fact wanted it.
There are several ways in which PPI was mis-sold. Lots of people took out PPI cover with their mortgages believing that it boosted their likelihood of being accepted, or that the policy was a necessity, and there are other ways it may have been mis-sold:
- Quite simply, were you aware you had the insurance policy added to your mortgage? If you had no idea you had it then you may have been mis-sold;
- If you were unemployed, retired or a student when MPPI was sold to you, then you might not have been able to ever claim on the policy, so it could have been mis-sold;
- If the policy costs weren’t listed separately to the mortgage advance, then you may have been mis-sold, because the seller was required to list the costs separately;
- Was information provided to you with information about alternative policies? If not, then you may have been mis-sold, because you may have been able to get cheaper cover elsewhere;
- Were you informed about any exclusions? For example, if you had a pre-existing medical condition, that may have voided the cover, in which case you could be classed as being mis-sold;
- Did you know that MPPI was optional, not compulsory? If the seller told you it was required in order to receive the mortgage, or you felt pressured in any way to get MPPI, then you might have been mis-sold;
- Did the seller check whether you already had other policies in place? You might have been fully covered already and so you may have been mis-sold if they failed to check;
- Did your employer provide full sick pay? If so, then you would have still been able to pay your mortgage payments and therefore MPPI was unnecessary.
PPI was widely mis-sold. It was only because of investigations and campaigns by the Citizens Advice and Money Saving Expert into how many PPI policies actually paid out compared to how many were sold did the scandal break. The Citizens Advice Bureau found that only 15 to 20 per cent of people with a PPI policy managed to successfully make a claim.
Mortgage Lenders You Used
Trying to remember the different lenders used can be difficult, but it doesn’t mean you can’t still check for mis-sold PPI or put a claim in.
There are many cases where people cannot remember the lenders they have used, mainly because of how long ago it was or the number of lenders they’ve used over time.
Looking for any paperwork relating to past mortgages will help to identify lenders and determine if you had PPI or not. If you don’t have any documentation, we may be able to help in trying to identify your past lenders.
Can I Still Reclaim MPPI If the Company is No Longer Trading?
If the company who sold you the MPPI is no longer trading or has been declared in default you may still be able to claim from the Financial Services Compensation Scheme (FSCS).
How Much Will I Get If My Mortgage PPI Claim Is Upheld?
The amount you can reclaim varies for each person depending on several factors. You may be owed hundreds or thousands of pounds, with some mortgage PPI policies worth as much as £40,000.
If your mortgage PPI claim is successful, the amount you are compensated by will consider the following:
- How much PPI you paid per month;
- The amount of interest added;
- Any charges for missed payments or arrears that could have affected the cost of the PPI.
When the above facts have been assessed and the amount to be refunded has been calculated, an additional sum for statutory interest at 8% should be added. This will make up the total amount payable for mis-sold PPI.
Bear in mind that it doesn’t matter if you have reclaimed PPI on other products (such as loans and credit cards) before, because each claim is separate. If you think you have been mis-sold PPI on your mortgage, then fill out a claim form on our website.
Mortgage PPI & Plevin Ruling
The Financial Conduct Authority (FCA) in August 2017 introduced a new ruling for PPI mis-selling called ‘Plevin’. Under this ruling, anyone who had PPI from a bank or lender attached to an active finance product since 2008 may be owed some money. In the past, in order to reclaim any PPI, you had to have been mis-sold it. The FCA’s new rule says if over 50% of your PPI cost went as commission to the lender, and that wasn’t explained to you, you can claim back the extra above that.
Following the ruling, the FCA set out guidelines that defined high commission as being more than 50% of the cost of the PPI premium and further stated how banks should investigate and correct PPI commission.
The Plevin ruling will not apply to everyone for example if as a result of a previous claim, you’ve already received a PPI refund, you cannot now claim for unfair commission.
If you have already raised a previous complaint for mis-sold PPI which was not upheld, you may be able to claim about the commission charged on your PPI policy. You may be eligible if the any of the following apply:
- the mortgage with the PPI was sold to you on or after 6 April 2007; or
- the mortgage with the PPI was sold to you before 6 April 2007 and was still in effect on or after 6 April 2008.
How Long Do I Have To Make A Mortgage PPI Claim?
The FCA has set a deadline of 29 August 2019 by when all claims for mis-sold PPI need to be submitted.
This means that your mis-sold mortgage PPI claim must be submitted before this date. New claims cannot be lodged after this date.
There may also be other time limits to considers, so act now and put in your mortgage PPI complaint as soon as possible.
Other Mortgage PPI Claim Help and Advice Services
Financial Conduct Authority (FCA)
12 Endeavour Square
Tel: 0800 101 8800
The FCA is the regulator for the financial services sector in the UK. They make sure that customers are treated fairly by financial services organisations, such as banks, credit card companies, mortgage companies and building societies.
The FCA cannot deal with individual mortgage PPI complaints. You will need to contact the relevant mortgage provider with your MPPI complaint first, who must respond within 8 weeks after acknowledging receipt.
The matter can be escalated to the Financial Ombudsman Service (FOS) if you are not happy with the response or if you’re claim has been rejected. They can look into the matter and give you their decision.
Financial Ombudsman Service (FOS)
Tel: 0800 023 4567
The FOS deals with complaints and disputes made by customers of UK banks, building societies, insurance companies and other financial services organisations including advisers.
For the FOS to look into you mortgage PPI complaint you will need to have contacted the organisation concerned and allowed them to put the matter right. If you’re not happy with the organisation’s response or lack or response, only then can the FOS get involved. However, you will to contact the FOS within 6 months after receiving the final response from the organisation concerned for them to be able to investigate the matter.
Financial Services Compensation Scheme (FSCS)
PO Box 300
Tel: 0800 678 1100
The FSCS is there to protect customers in the event of an authorised financial services organisation fails i.e. firms that are authorised by the FCA and the Prudential Regulation Authority.
If the organisation you are dealing with has gone out of business, cannot pay the claims made against it or has been declared in default, the FSCS can make an award of compensation. The award will only be a maximum of 90% of the mortgage PPI claim where there has been actual financial loss.
Banks & Lenders Facing Mortgage PPI Queries
The following is a list of mortgage providers who are known to have sold PPI. Please note this is not an exhaustive list.