Can I reclaim payment protection insurance on my mortgage?

Summary: This article helps to identify the differences between payment protection insurance (PPI) and mortgage payment protection insurance (MPPI) and if it can be reclaimed.

Payment protection insurance (PPI) has caused quite a stir in recent years with many reports of mis-selling, which has led to thousands reclaiming their payments along with interest. While it can be a useful product, PPI in many cases turned into a money making scheme for those selling it.

What is the difference between PPI and MPPI.

PPI on a loan or credit is usually a single-premium PPI policy and is designed to cover the cost of the minimum payment on the credit upon which it was taken out, for a set period of time (usually 12 months), if the individual is made redundant or develops a medical condition preventing them from work, and where they do not get full sick pay. However, it was often sold to people who didn’t need it or under false pretences. Mortgage payment protection (MPPI) is still PPI, but generally referred to as a regular-premium PPI policy. Unlike PPI on a loan, it is often considered a very important insurance. It is designed to cover monthly mortgage repayments (again for a specified period of time) for those unable to work due to an accident, sickness or unemployment.

Could I have been mis-sold MPPI?

It is possible for MPPI to have been mis-sold, as with any insurance. For example, if an individual already had cover elsewhere and the seller was aware of this, they were pressured into taking out the MPPI, or given the impression that it was compulsory. If an individual genuinely believes they were mis-sold MPPI, then there may be a case to be heard, but in recent years, the MPPI industry has seen a huge clamp down and the sale of MPPI has been heavily regulated meaning that it is difficult to prove mis-selling unless there is good evidence.

For anyone considering making a complaint about mis-sold MPPI, it is important to first gain impartial advice from an organisation such as the Citizens Advice Bureau (CAB). If the motive for trying to gain compensation is due to financial difficulties and debt, it may also be worth considering options such as an Individual Voluntary Arrangement (IVA) or Debt Management Plan (DMP).