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  • FIRST POST
    • tony6403
    • By tony6403 11th Mar 17, 1:01 AM
    • 1,214Posts
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    tony6403
    PPI Claim Rejected by Nationwide
    • #1
    • 11th Mar 17, 1:01 AM
    PPI Claim Rejected by Nationwide 11th Mar 17 at 1:01 AM
    I summary this is what I received refusing my application for PPI -
    "You took out a mortgage and at this time a PPI policy was added to the account covering for unemployment .
    You were eligible for the policy and would have been able to make a claim.
    The policy was a condition of the advance. If you found the conditional nature of the policy to be unacceptable you could have rejected the offer and withdrawn your application for the mortgage.You were free to look elsewhere. "

    I have checked my documents and clause 43 of the conditions does indeed state that PPI was required. That had not registered with me at the time and certainly nothing was said.
    Is the stance above in italics unassailable ?
    The paragraph about being eligible for the policy seems absurd.
    Should I give up ?
    Forgotten but not gone.
Page 1
    • Agricolae
    • By Agricolae 11th Mar 17, 3:27 AM
    • 365 Posts
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    Agricolae
    • #2
    • 11th Mar 17, 3:27 AM
    • #2
    • 11th Mar 17, 3:27 AM
    That's odd. So they're saying you wouldn't have got the mortgage unless you also took PPI?

    Normally (in the context of this scenario) mis-sales occur when a lender says to someone "You must take this PPI" when actually they don't need to have it to take the loan. What Nationwide seem to be saying is "actually, we wouldn't have lent to you without PPI".

    I will wait for someone else to advise on this!
    • zx81
    • By zx81 11th Mar 17, 6:47 AM
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    zx81
    • #3
    • 11th Mar 17, 6:47 AM
    • #3
    • 11th Mar 17, 6:47 AM
    If it was a condition of the mortgage, then it's not mis sold.


    Why is the eligibility line absurd? Isn't it good that they have confirmed you would be able to make a claim if the worst happened?
    • Moneyineptitude
    • By Moneyineptitude 11th Mar 17, 10:29 AM
    • 18,712 Posts
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    Moneyineptitude
    • #4
    • 11th Mar 17, 10:29 AM
    • #4
    • 11th Mar 17, 10:29 AM
    Nationwide seem to be saying is "actually, we wouldn't have lent to you without PPI".

    I will wait for someone else to advise on this!
    Originally posted by Agricolae
    There were numerous instances where PPI was a requirement of a mortgage being granted. Usually it was in exchange for "free" mortgage advice, but there were other reasons too.

    As you say, a mis-selling complaint can only be made when the customer was told the insurance was compulsory when it actually wasn't.
    • dunstonh
    • By dunstonh 11th Mar 17, 2:14 PM
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    dunstonh
    • #5
    • 11th Mar 17, 2:14 PM
    • #5
    • 11th Mar 17, 2:14 PM
    A number of lenders did have mortgage deals that required the purchase of an insurance company. That type of cross subsidy deal is allowed and where it is required, it cannot be mis-sold.

    I have checked my documents and clause 43 of the conditions does indeed state that PPI was required. That had not registered with me at the time and certainly nothing was said.
    That proves it was not mis-sold.

    The paragraph about being eligible for the policy seems absurd.
    No it doesn't. The requirements are that the policy sold still has to be suitable and eligible. If it wasnt they could use a different type of insurance instead. So, that bit of their response is covering the eligibility and suitability side.

    Should I give up ?
    As it was not mis-sold, then yes.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • tony6403
    • By tony6403 13th Mar 17, 12:38 AM
    • 1,214 Posts
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    tony6403
    • #6
    • 13th Mar 17, 12:38 AM
    • #6
    • 13th Mar 17, 12:38 AM
    If it was a condition of the mortgage, then it's not mis sold.


    Why is the eligibility line absurd? Isn't it good that they have confirmed you would be able to make a claim if the worst happened?
    Originally posted by zx81
    Because to effect any insurance it is a prerequisite that you must be eligible for it. In short, stating the obvious.
    The building society changed their conditions in 2004 and the PPI was no longer compulsory from then on.
    They cancelled my PPI at that time and the "worst" happening was apparently not such an issue..
    Forgotten but not gone.
    • -taff
    • By -taff 13th Mar 17, 1:21 AM
    • 7,102 Posts
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    -taff
    • #7
    • 13th Mar 17, 1:21 AM
    • #7
    • 13th Mar 17, 1:21 AM
    So were you unemployed or employed when you took the mortgage out?
    If the former, i can see why you'd have a problem with eligibility, otherwise.......
    • Moneyineptitude
    • By Moneyineptitude 13th Mar 17, 2:20 AM
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    Moneyineptitude
    • #8
    • 13th Mar 17, 2:20 AM
    • #8
    • 13th Mar 17, 2:20 AM
    Because to effect any insurance it is a prerequisite that you must be eligible for it. In short, stating the obvious.
    Originally posted by tony6403
    No.
    If you had not been eligible then you would have been mis-sold.

    Since your complaint that you were told it was compulsory was not valid (because the insurance WAS compulsory) the Bank then checked your eligibility as part of their investigation.

    Stating the obvious, perhaps, but also stating exactly why your complaint is rejected.

    Changing the conditions of the insurance at a later date does not make the insurance mis-sold, I'm afraid.

    However, why was the insurance cancelled in 2004?
    • tony6403
    • By tony6403 18th Mar 17, 11:45 PM
    • 1,214 Posts
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    tony6403
    • #9
    • 18th Mar 17, 11:45 PM
    • #9
    • 18th Mar 17, 11:45 PM
    No.
    If you had not been eligible then you would have been mis-sold.

    Since your complaint that you were told it was compulsory was not valid (because the insurance WAS compulsory) the Bank then checked your eligibility as part of their investigation.

    Stating the obvious, perhaps, but also stating exactly why your complaint is rejected.

    Changing the conditions of the insurance at a later date does not make the insurance mis-sold, I'm afraid.

    However, why was the insurance cancelled in 2004?
    Originally posted by Moneyineptitude
    The cancellation happened when Nationwide took over my building society at that time.
    I accept what you say about the rejection.
    What is annoying is that I didn't need any sickness cover as my employer provided pay for up to a year ( 6 months full/ 6 months half) and the chances of losing the job were very remote indeed.
    I imagine that even if the building society had drawn attention to the requirement for PPI when taking out the mortgage it wouldn't have been a deal breaker - I probably would have accepted it as the norm.
    However , Nationwide have said that they will review my claim in the light of the "non disclosure of commission " issue and will get back to me.
    From what you have indicated I am not making plans for a windfall.
    Forgotten but not gone.
    • Moneyineptitude
    • By Moneyineptitude 19th Mar 17, 12:43 AM
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    Moneyineptitude
    Nationwide have said that they will review my claim in the light of the "non disclosure of commission " issue and will get back to me.
    Originally posted by tony6403
    That's a reference to the Plevin ruling which only applies to rejected complaints and may (or may not) result in some minor redress.
    • dunstonh
    • By dunstonh 19th Mar 17, 1:10 AM
    • 89,532 Posts
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    dunstonh
    What is annoying is that I didn't need any sickness cover as my employer provided pay for up to a year ( 6 months full/ 6 months half) and the chances of losing the job were very remote indeed.
    The FOS rejects complaints where people have 12 months sick pay. So, even without it being compulsory, that isnt a strong reason with MPPI (it is with loan/credit card PPI).

    However , Nationwide have said that they will review my claim in the light of the "non disclosure of commission " issue and will get back to me.
    From what you have indicated I am not making plans for a windfall.
    Let us know when you do find out as we havent had many plevin outcome responses yet. So far, no success as commissions below the 50% mark. MPPI typically had the lowest commission of the PPI types too.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • dneale123
    • By dneale123 20th Oct 17, 1:34 PM
    • 2 Posts
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    dneale123
    tony6403's story is exactly the same as mine. In my case Nationwide pointed out at the time that PPI was a condition of the mortgage offer and refused to allow me to proceed without accepting it - I opted for an extra monthly payment (on top of their own indemnity insurance of 1% for the first year).

    Eventually I cancelled the PPI myself about 5 years later and Nationwide accepted this without question. When I submitted my claim recently the response from Nationwide says that their acceptance of my cancellation was 'a concession' and that I should have continued with it until age 65 (or, as it turned out, when I eventually remortgaged with another provider).

    When I took out the mortgage Nationwide admitted that I had enough savings to cover the payments in the event of being unable to work, and my employer would have paid me for at least 6 months at full salary in the event of sickness. Like tony6403, Nationwide rejected my claim telling me that I didn't have to accept their mortgage offer.

    So yes, I admit that I went in with eyes open at the time and can't claim that the insurance wouldn't have paid out under certain circumstances. I can, however, claim that I didn't need or want the insurance but was given no choice. The fundamental question is whether it is possible to claim in the light of more recent events that the inclusion of compulsory PPI in the conditions for being granted a mortgage would in itself constitute mis-selling. This appears not to be the case but I can't find any concrete evidence of this. Can anyone point to any FOS rulings on this?
    Last edited by dneale123; 20-10-2017 at 2:15 PM.
    • societys child
    • By societys child 20th Oct 17, 3:06 PM
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    societys child
    The fundamental question is whether it is possible to claim in the light of more recent events that the inclusion of compulsory PPI in the conditions for being granted a mortgage would in itself constitute mis-selling
    Not if it was a requirement at the time. See posts #3 #4 and #5.

    • dneale123
    • By dneale123 20th Oct 17, 5:12 PM
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    dneale123
    Thanks - what I was looking for was an example of a FOS ruling to put this matter to bed. In the end I think I've managed to answer my own question by finding this FOS case study - number 118/6 describes such a ruling [I'm not permitted to post the link]. What I wasn't sure of was whether lenders were within their rights at the time to insist on PPI as part of the conditions of a loan or whether the small print was in fact unenforceable in law. The former does appear to be the case according to the FOS.
    • Moneyineptitude
    • By Moneyineptitude 20th Oct 17, 11:03 PM
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    Moneyineptitude
    What I wasn't sure of was whether lenders were within their rights at the time to insist on PPI
    Originally posted by dneale123
    They were (and are) able to do exactly that. Of course, potential customers are free to shop elsewhere if they don't like that condition.

    Not mis-sold.
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