Removing PPI on a Clydesdale Bank Loan

andrew_dunbar

Hi there

Myself and the missus also tried to cancel out PPI on a £5000 loan that was taken out 1 year ago at our local Clydesdale.

After being told to make an appointment with the bank, we were informed that the only way to remove the PPI was to reapply for a new loan. Due to the difference in interest rates (it would jump from 8% to 18%) we would end up actually paying more per month.

Can this be right?

I also have a loan with RBS, with Loanguard, and according to RBS, all they would need is a letter stating that I wished to canclee the loanguard. I'm chasing them up at the moment as its been over 3 weeks and nothing, but we shall see. Thankfully I'm in a position financially where I am aiming to pay off all loans within 3 years, but I detest the idea of payming for insurance which is just ........ rubbish really.

Thanks for any advice

marshallka

Take a look here at what the FSA say on cancelling PPI premiums.



http://www.fsa.gov.uk/pages/Doing/Regulated/consumer/tackle/ppi.shtml
might give you a very good argument.

Good luck

ALso why did you take this insurance out?? Were you given it compulsory to the loan and also if it was this was missold. Take a look at the PPI reclaiming thread and it might give you some idea of what i talking about here.

andrew_dunbar

Hi marshallka, thanks for the link.

In all fairness, the decision to take out the PPI was a decision between myself and the missus, however I'm now in a job within Royal Mail which is a step up the ladder, with a bit more security, so I'm now aiming to clear the loans that we have. Obviously, a great way to clear that is to remove the PPI, but as mentioned before, I think its unfair that the Clydesdale have essentially said:

"If you want to remove the PPI, you have to reapply for a new Loan. Due to the increase on interest for small loans, your interest rate would go from 8% to 18%, which would cause your monthly payment to increase, even without the PPI"

At the moment the loan payment is £100 per month, with £35 of that accounted for by PPI. I assumed that all it took was a letter to the branch manager requesting removal of the PPI, but I was told that that was not available as an option, and a new loan would be required.

From what I've picked up on the forums so far, this is incorrect, as with the other loan I have with RBS, they have accepted the letter I hand delivered to them, and the request is on file to be actioned this week.

In the forums opinion, am I correct in my thinking with regard to the cancellation of PPI. I'll have a good look through all the paperwork for the Loan (Interesting thing is our copy of the loan does not have the PPI option ticked, could this be a factor?) but I'm curious to hear if any other Clydesdale Bank customers were successfull in removing their PPI.

marshallka

andrew_dunbar wrote: »

Hi marshallka, thanks for the link.

In all fairness, the decision to take out the PPI was a decision between myself and the missus, however I'm now in a job within Royal Mail which is a step up the ladder, with a bit more security, so I'm now aiming to clear the loans that we have. Obviously, a great way to clear that is to remove the PPI, but as mentioned before, I think its unfair that the Clydesdale have essentially said:

"If you want to remove the PPI, you have to reapply for a new Loan. Due to the increase on interest for small loans, your interest rate would go from 8% to 18%, which would cause your monthly payment to increase, even without the PPI"

At the moment the loan payment is £100 per month, with £35 of that accounted for by PPI. I assumed that all it took was a letter to the branch manager requesting removal of the PPI, but I was told that that was not available as an option, and a new loan would be required.

From what I've picked up on the forums so far, this is incorrect, as with the other loan I have with RBS, they have accepted the letter I hand delivered to them, and the request is on file to be actioned this week.

In the forums opinion, am I correct in my thinking with regard to the cancellation of PPI. I'll have a good look through all the paperwork for the Loan (Interesting thing is our copy of the loan does not have the PPI option ticked, could this be a factor?) but I'm curious to hear if any other Clydesdale Bank customers were successfull in removing their PPI.

Yeah ok, it was your decision to take it out but did you know all this about cancelling the policy etc and if you did was it on your terms and conditions and explained to you. We all want to protect our payments and that is what you trusted these to do but not to exploit you at the same time if you wanted to end the policy. Another thing is the tick box not being ticked.

Would you in all fairness if you knew what you know now have taken out a policy like this one you had??? If you knew all what was entailed and also were you offered anything else or told to shop around??

Were you missold this policy??

andrew_dunbar

marshallka wrote: »

Yeah ok, it was your decision to take it out but did you know all this about cancelling the policy etc and if you did was it on your terms and conditions and explained to you. We all want to protect our payments and that is what you trusted these to do but not to exploit you at the same time if you wanted to end the policy. Another thing is the tick box not being ticked.

Would you in all fairness if you knew what you know now have taken out a policy like this one you had??? If you knew all what was entailed and also were you offered anything else or told to shop around??

Were you missold this policy??

I have to admit that cancelling the policy past the 14 day period was not discussed or explained. I also have to say that in hindsight I would not have decided on a PPI policy. However I am unsure if this constitutes a missold policy.

marshallka

andrew_dunbar wrote: »

I have to admit that cancelling the policy past the 14 day period was not discussed or explained. I also have to say that in hindsight I would not have decided on a PPI policy. However I am unsure if this constitutes a missold policy.

Right then you can perhaps make a complaint for the fact that this is an unfair term (that if you cancel then you have to take another loan over double the the APR), I take it this term is on your terms and conditions?? In all fairness this cancelling the policy should not increase your APR at all. Also was this a single premium policy and would cancelling mean that you will only get a small rebate back and also you will be paying interest on this for the full term of the loan??

Is it single premium??

I still think this policy is missold as you know nothing of all this and certainly did not expect what has happened to happen and their terms are not fair at all. You were not offered to get this elsewhere, its not compulsory to the loan and you have stated that you did not tick the box and also what would happen on cancelling??
Were you informed anything about this policy??

andrew_dunbar

marshallka wrote: »

Right then you can perhaps make a complaint for the fact that this is an unfair term (that if you cancel then you have to take another loan over double the the APR), I take it this term is on your terms and conditions?? In all fairness this cancelling the policy should not increase your APR at all. Also was this a single premium policy and would cancelling mean that you will only get a small rebate back and also you will be paying interest on this for the full term of the loan??

Is it single premium??

I still think this policy is missold as you know nothing of all this and certainly did not expect what has happened to happen and their terms are not fair at all. You were not offered to get this elsewhere, its not compulsory to the loan and you have stated that you did not tick the box and also what would happen on cancelling??
Were you informed anything about this policy??

Hi Marshallka

I've got the Loan agreement here, and there is nothing in the terms and conditions regarding having to reapply for a loan in the event of removal of PPI.

As far as I can surmise, the PPI is a Single premium, as it is a seperate calculation on the loan summary (84 payments of £20.24 in addition to the actual loan payments) - looking at the actual terms, the only mention of the PPI is:

"When you take a loan to meet the cost of Repayment Protection Insurance, you agree that we should pay that loan to the insurers or as they tell us. You agree that you have received a policy summary with details of the insurers and the main terms of the policy document. The oilicy is a contract between you and the insurers.

You agree that the way credit any insurance moneys we receive towards any sums payable at any time by you under the agreement"

However, we definately did not receive any policy summarys or policy main terms, as I keep ALL paperwork together, and have double checked.

andrew_dunbar

Just finished typing up a letter, what do you guys think?

Dear Sir/Madam
I am contacting you regarding the cancellation of the Payment Protection Insurance (PPI) that is in place on myself and my partners current loan with yourself.
The details of our joint account are:
Sort code XX-XX-XX
Account No XXXXXXXXX
The loan was arranged on the 02/07/2007 with your representative XXX XXX, and £5000 was borrowed for home improvements, namely a new heating system for the above property. At the time I and Karen agreed to take out PPI on the loan, however due to a recent financial review with our Advisor, I arranged for a Salary Insurance policy with Unum Insurance Services.
Due to this change in services, I made an appointment with you to arrange the removal of the PPI from the loan. However, we were told that we would be unable to remove the PPI unless we reapplied for a new loan, to settle the existing loan. This would result in a jump from 8.9% interest to 18% interest.
Reviewing the Loan Terms and Conditions, I can find no stipulation regarding the cancellation of PPI, and according to the published FSA reports of November 2005 & October2006, this is contrary to their guidelines. I also feel that it is unfair that I and my partner be financially disadvantaged for removing an optional insurance policy.
I would also like to raise the point that according to the Terms and Conditions of the Loan:
Section 10
"When you take a loan to meet the cost of Repayment Protection Insurance, you agree that we should pay that loan to the insurers or as they tell us. You agree that you have received a policy summary with details of the insurers and the main terms of the policy document. The policy is a contract between you and the insurers.

You agree that the way credit any insurance moneys we receive towards any sums payable at any time by you under the agreement"
I can confirm that I did not receive a Policy Summary or Main Terms outline, which again contravenes your own Terms in regard to PPI.
I would appreciate a swift reply to this matter, as I feel that the nature of our enquiry is a reasonable one. I request that the Payment Protection Insurance policy is cancelled, and that the monthly payments towards the loan be reduced to reflect the cancellation of said policy. As you can see from out records, I and my partner have never missed a payment on this loan, and we do not plan to. However, I hope you agree that there is no point in paying multiple insurance policies that cover the same content.
Yours Sincerely

marshallka

Looks good to me. Perhaps you would be better joining the PPI reclaiming discussion thread and loads of advice there.