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Home Owner (secured) LoansThe most common reasons (but not a complete list) for the mis-selling of PPI on home owner or secured loans are:The Lender automatically added in the insurance premium without your agreement or approval. Here the Lender is relying on you to notice this and tell them that you do not want the insurance. You were told or led to believe that your loan would not be granted if you did not take out the insurance. This is a particularly underhand tactic as it preys upon your desire to have the loan monies as quickly as possible. The insurance policy lasted only 5 years whereas the loan was underwritten over a significantly longer term, even upto 25yrs. The lender is likely to argue that they expected you to settle your loan within 5 years by re-mortgaging. Not something that is easily likely in today’s financial climate.. The Lender did not ‘clearly’ ask you if you already had an existing insurance that would cover your loan repayments. The policy was not properly described to you and you bought it without fully understanding its suitable or how it really worked. This may have been particularly true if you were actually in-eligible for the insurance due to a pre-existing illness or medical condition, or perhaps because you were self- employed. The true cost of the insurance policy was not explained or made clear to you. This follows on from above, because you are potentially still paying for an insurance policy many years after the cover has ceased. The refund at early settlement bore no resemblance to the value of the premium or the un-expired term. The lender should have clearly explained how much you would get back if you settled early. The lender did not clearly explain that certain policy ‘benefits’ such as “cashback” may be forfeited if you go into arrears, and that benefits were dependant on the extent and frequency of the arrears You felt pressurised into taking insurance with the loan. Many lenders employ tactics designed to keep you talking in the hope they can wear you down and that you will give in or be talked into taking the insurance. Clearly it is not always possible to go through every term and condition relating to an insurance policy during the course of telephone conversations with your lender, but they do have a duty of care to ensure all significant facts are clearly brought to your attention. You may be entitled to a refund of all, or part, of your insurance premium if any of the above occured. This may also include a rebate on any interest paid to date. |
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