Upheld: PPI mis-selling complaint against Cambridge Building Society

Decision detail

Summary

Mrs O and Mr O complained that Cambridge Building Society mis-sold them a monthly premium PPI policy in 2003 in connection with a joint mortgage with a 70/30% benefit split. The ombudsman upheld the complaint, finding that Mrs O was not eligible to purchase the policy because she and Mr O had disclosed her impending redundancy to the mortgage adviser, which was noted in the adviser's meeting notes. The PPI policy terms explicitly required that consumers not be aware of impending unemployment to be eligible. The ombudsman found CBS failed to highlight this fundamental eligibility issue despite the adviser's knowledge, which would have adversely affected their mortgage protection. CBS was ordered to refund all premiums paid plus 8% simple interest.

The Ombudsman's reasoning

For non-advised sales, CBS had to provide clear, fair and non-misleading information to allow informed choice, including eligibility information. The PPI policy terms explicitly required that consumers not be aware of impending unemployment. Since Mrs O and Mr O were aware of and disclosed Mrs O's impending redundancy to the adviser (as recorded in notes), Mrs O did not satisfy the eligibility criteria and could not make a successful claim. This fundamental eligibility failure was not suitably highlighted despite the adviser's knowledge, and would have adversely affected their ability to obtain mortgage protection. The ombudsman found this was a failing in the sale.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website