Mortgage protection insurance is a type of Pure Protection Insurance designed to help pay off your mortgage if something happens to you. It often includes life insurance, critical illness cover, or income protection. Many people pay into these policies for years, trusting they’re protected.
But many of these policies were sold with ‘loaded premiums’, these are extra hidden charges that went directly to advisers or brokers as commission. These inflated costs meant customers were paying significantly more than they needed to, with no added benefit.
Loaded premiums are mark-ups added to your monthly insurance premium, often without your knowledge, to increase the broker or adviser’s commission. These charges typically added 10 – 30% to the cost of the policy, with no additional cover or benefit for the policyholder.
There is no cap on how much commission can be added, and the practice has come under growing scrutiny and criticism. Financial advisers and industry experts have warned that loaded premiums could be the next mis-selling scandal, and the financial industry regulator, the Financial Conduct Authority (FCA) has taken notice and is taking action.
In 2024, the FCA announced that it would be carrying out a market-wide review of pure protection insurance products, including those sold alongside mortgages.
The FCA is focusing on whether these products offer fair value, examining:
These industry-wide concerns mean now is a crucial time to check if your policy was fairly sold.
Common examples of mortgage protection mis‑selling include:
If you have been affected, you may be entitled to compensation. TLW Solicitors specialise in consumer financial claims and refunds, so contact us today to see if you are eligible to make a ‘no-win, no-fee’ compensation claim.
If we think that you have the basis of a claim, then we will go through all of your options, including gathering all of the relevant evidence, preparing all your documents, do the chasing on your behalf and advise you if and why any settlement offer is reasonable, based on the circumstances of your case, ultimately ensuring that you recover the compensation you are owed.
Loaded premiums are hidden charges added to your monthly mortgage protection policy cost, usually to pay commission to the adviser or broker. These extra costs increase what you pay without improving your insurance cover.
Yes. You may still be entitled to compensation for the time you paid into the policy, especially if it was unsuitable, too expensive, or sold under pressure.
To start your claim, we’ll need the following information:
The circumstances of each case are different, but our mis-sold insurance claims process is as follows:
Step 1 – You will provide us with the necessary details we need to determine whether you have a valid complaint for the insurance mis-selling by whoever advised on or sold you the policy, be that the insurers themselves, a financial adviser, mortgage broker etc. If having reviewed that information, we are happy to go ahead and investigate your case, we will securely send you our online agreement via e-sign for you to review and return.
Step 2 – Based on the information provided and using our technical knowledge and expertise of mortgage protection insurance mis-selling cases, our team will draft the complaint and send to whoever sold/advised you about the policy/policies. We will decide whether it is necessary to obtain your file or other details and, if so, we will send a data subject access request on your behalf.
Step 3 – Once we receive a response from whoever advised on or sold you the policy, we will explore the options available to you, including whether any offer made is reasonable and should be accepted. If in our opinion, we don’t think that you should accept the offer, we will give our reasons why. If appropriate, we will then prepare your case for submission to the Financial Ombudsman Service (FOS), an independent government-backed body that resolves disputes between FCA-regulated financial businesses and their customers.
We’ll manage the FOS complaints process and support you throughout, making sure all the correct arguments are raised and supported by the right evidence, giving you the best chances of success.
The value of your claim will depend on a wide range of factors, including what insurance products you have been sold, the age of the policy, the wording of the policy, your individual circumstances (eg health, family members, age), premiums paid, etc.
Compensation is calculated based on what you overpaid, particularly due to loaded premiums. If successful, you may also receive statutory interest to cover the time your money was unfairly taken.
Each case is unique, and our specialist team will ensure that we aim to recover what you are rightfully owed.
We work on a ‘no win, no fee’ basis, so there’s nothing to pay upfront. If your claim is successful, our fee will be deducted from your compensation. All costs are agreed in advance and are fully transparent.
Our costs are governed by the Solicitors Regulation Authority. More details of which can be provided to you before you decide if you wish to proceed with a claim.
Timeframes vary from case to case. Insurers, advisers and brokers usually have 8 weeks to respond to the initial complaint. If the case goes to the Financial Ombudsman Service, it may take several more months depending on the complexity of the issues, how co-operative those involved are and the amount of evidence involved.
If the firm that recommended or sold you the policy has closed down, you may still be eligible to make a claim through the Financial Services Compensation Scheme (FSCS), a government backed lifeboat scheme set up to compensate victims of failed FCA regulated financial businesses.
At TLW Solicitors, we are specialists in a wide range of financial mis-selling consumer claims.
We offer:
If you are concerned that you or a loved one was mis-sold mortgage protection insurance or another type of pure protection insurance, such as life insurance, critical illness cover or income protection insurance, please call us on 0191 293 1500, email or complete one of the forms below.
It is important to get advice as soon as possible, as strict time limits can apply.
Minimum claim values apply.
Meet Sarah, who heads up our experienced Mis sold Mortgage Protection Claims team.
Sarah and her colleagues are on hand to help with your claim.
