Not upheld: PPI mis-selling complaint against Market Harborough Building Society

Decision detail

Summary

Mr and Mrs T complained that Market Harborough Building Society mis-sold two mortgage PPI policies taken out in 1998 and 2000. The ombudsman found that the 1998 policy was not mis-sold as it was optional and the customers completed a separate application form, and the 2000 policy was not mis-sold despite being compulsory as the firm was transparent about this condition. However, the ombudsman found that the firm failed to disclose that commission and profit share on the 2000 policy exceeded 50% of the premium, which was unfair. The firm has already refunded the excess commission and profit share, so no further compensation was awarded.

The Ombudsman's reasoning

For the 1998 sale, the ombudsman found that Mr and Mrs T had a choice about PPI, completed a separate application form, and would have known it was optional given they already had a mortgage in place. The policy would have been useful given their circumstances and employment benefits. For the 2000 sale, although PPI was compulsory with that mortgage product, this was not mis-selling as the firm was transparent about the condition and customers could have chosen alternative products. However, the firm failed to disclose that commission and profit share exceeded 50% of the premium, which was unfair and required refund of the excess.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website