Cancelled PPI - Application Refused

denys

A question.

Have you ever heard or received any OFFICIAL indication that opting out for PPI when applying for a card affects lender’s decision? I have an interesting situation now when a friend of a friend of mine was refused Co-op cc only because she opted for PPI during her online application and then refused to sigh for it on a credit agreement form. Co-op given her much smaller credit limit then requested so she based her argument on not needing PPI to cover it and actually wrote a covering letter advising them of the change. First reply was – please tick the box and sign for PPI, second, after her refusal – cancellation of the application. So if I understand correctly Co-op staff implying that her decision not to take PPI caused them to cancel, which was otherwise successful application?

Please post if you have similar experiences. I mean we all know that opting for PPI makes more money for banks, but where do they stay here legally? Can one argue that cancellation of otherwise approved application for not taking out PPI is unreasonable of even somehow unlawful?

Thank in advance.

Denys

Rafter

Denys,

I thought this was illegal? The insurance protection is for your benefit not the Co-ops and they should be underwriting your credit limit on your ability to pay, not whether you take insurance or now.

What is to stop your friend of a friend buying an income protection policy at much lower cost from somewhere else for example?

I would make a formal complaint to the co-op threatening to refer them to your local trading standards office for breach of the consumer credit act.

They are certainly be in breach of this. If the insurance is a condition of the borrowing (which it clearly is in this case) then the cost must be included in the typical APR advertised. They are clearly in breach of the advertising rules at least.

R.

denys

Thanks Rafter,

When she rang to complain they once more insisted on her purchasing PPI, backing it “you have agreed to PPI on your initial application”, then offered her to submit another application, refusing to remove previous search. And this was one of their senior staff – so called “floor supervisors”. What a hard sale. Unbelievable. Such a difference they treat lower-profile customers with. I am now composing a sharp letter to these baskets asking for something more than a simple apology. No doubt of course they will find an alternative excuse for cancelling application when pressed, but at least I’ll get unreasonable fees for writing to them.

cornerclose

I've just activated my new Lloyds TSB Platinum card which I applied for without PPI. The girl I spoke to was very pleasant but remarkably insistent that I needed this, to the point where she seemed to imply that they might think twice about transferring the maximum allowed (limit minus £100) without it. If I had not read so much about it on here I would certainly have been frightened into taking it out. Instead I told her firmly that I could well afford to pay back what I had borrowed should the need arise (which is true as I am using it for stoozing) and she did back down.

Chadsman

I usually sign up for the PPI just because it might get me a few extra browny points when they assess my credit limit. As soon as the card is granted I call them to say I changed my mind, if they get a bit stroppy I say I have more than enough income protection already.
I have no evidence to say it helps but it certainly wont hinder.
:beer:

SparciaM

Where I work, signing up for PPI doesn't play any part on if you get credit or not. When speaking with our lending underwriters, they actually say it actually makes it harder to get the credit - as the PPI is more expensive and so you have to pay back more each month.

Also, if people wish to take off the PPI they can with the simple click of a button of the machine I work on.!.

Simple as.....

regularsaver1

Where I work it makes no difference either

PPI should be sold to a need. No point in taking insurance and then just cancelling it. and no one should get stroppy about you cancelling it or saying no if it doesn't fit your needs.

Lenders have to be responsible and mention it to people if they are eligigible and it could fit their needs. I have seen a case of "no we do not need any cover" and then the husband died and "you didnt menion cover to us" when there was evidence - or "your my lender i've lost my job what can you do for me (with no cover)"
so if a lender/bank did not mention it that would be wrong too

they should not decline you based on cancelling, hoewever, it would be a new contract, and therefore possibly they would want her to re-apply?

Red_Elle

I had the same problem with Northern Rock when I took out a loan with them and posted about it on here. They implied that the loan would be rejected if I didn't take out PPI. I refused and they sent the forms through with PPI on them. I called, they were unbelievably rude to me. I wrote to complain, stating that this was breaching regulations and got a very, very apologetic letter back saying that the person who had spoken with me had been removed from the department.