Should PPI Be Offered By The Bank?

Cashpig74

Just wondered as I have a loan with the Nationwide and their customer service team told me in no uncertain terms that it is a legal requirement to read the "t+c" of the PPI during a loan application. Does this mean also that the banks are obliged to offer the product?

I was not offered it during my loan application and PPi is not mentioned at all on my Credt Aggrmnt.

Have they made an error??

di3004

Cashpig74 wrote: »

Just wondered as I have a loan with the Nationwide and their customer service team told me in no uncertain terms that it is a legal requirement to read the "t+c" of the PPI during a loan application. Does this mean also that the banks are obliged to offer the product?

I was not offered it during my loan application and PPi is not mentioned at all on my Credt Aggrmnt.

Have they made an error??

Hi there
Not too certain on this one, but sure someone will be able to post some info on this for you.;)

petermb_2

Cashpig74 wrote: »

Just wondered as I have a loan with the Nationwide and their customer service team told me in no uncertain terms that it is a legal requirement to read the "t+c" of the PPI during a loan application. Does this mean also that the banks are obliged to offer the product?

I was not offered it during my loan application and PPi is not mentioned at all on my Credt Aggrmnt.

Have they made an error??

PPI is no longer available from most lenders. There are major issues surrounding the sale of this product that leaves the institution wide open for challenge. The lenders now realise they have made huge mistakes that put them in jeopardy nd are trying to overcome the problem. Hence RBS hoping they can mitigate the likely liabilities by offering all their clients with ppi what appears to be a windfall. Just watch that when the papwerwork comes it will also include a full and final settlement agreement.

di3004

This is something similar to what I posted in the discussion thread the other week, may be the same link, can't remember, interesting though.

http://www.tiscali.co.uk/money/guardian/features/2009/02/22/banks-fobbing-off-ppi-mis-selling-complaints-with-goodwill-payments.html

Banks fobbing off PPI mis-selling complaints with 'goodwill' payments

Banks fobbing off PPI mis-selling complaints with 'goodwill' payments




Customers who reclaim mis-sold loan insurance from banks and other lenders are being warned not to accept "gesture" payments worth a fraction of their potential payout.


Nine out of 10 payment protection insurance (PPI) mis-selling claims rejected by lenders are now being upheld by consumer watchdog the Financial Ombudsman Service, up from a historical level of 40%. It says this is because borrowers have been "fobbed off" with less than they are entitled to.

The problem has become so acute officials at the FOS and City regulator the Financial Services Authority (FSA) are working together to resolve it.

The FOS estimates that, by the end of next month, it will have received a record 25,000 complaints about the mis-selling of PPI. These controversial policies, often expensive and designed to pay out to cover personal loans or credit card payments if you fall ill, suffer an accident or lose your job, have been dragged into the spotlight after customers found they did not qualify for a claim or did not realise they had been mis-sold the policies.

How to resolve the issue is becoming a major problem for the watchdog and regulator since the banking industry, largely responsible for the millions of sold policies, is repeatedly failing to appropriately process the complaints, a spokesman for the FOS says.

"Our concern is that lenders across the board simply aren't learning and are making the same mistakes," he says. "The real worry is that....
those individuals mis-sold policies who don't realise they can use the FOS will be easily fobbed off with the lower sum. "


Claims company Brunel Franklin says it has noticed an emerging pattern of "goodwill" payments to complainants by RBS, the bank part-owned by the government and bailed out by taxpayers' cash, designed to throw customers off the scent of a bigger payout. Each RBS payment is set at £750, often much less than the amount owed, says Sally Bowyer, managing director of BrunelFranklin.com.

"The customer often seems to be fobbed off with around £750 as a gesture of goodwill, when the average PPI claim we handle is around £2,200. If RBS is trying to minimise claims to around £750, it may be in a planned effort to reduce its projected compensation payouts by up to two-thirds."

A NatWest/RBS spokeswoman said: "We are satisfied that our complaints-handling procedures are fair, that every case is considered on its own individual merits, and that the decisions reached are reasonable, based on the evidence available. There is no obligation for our customers to accept our settlement offer. Any customer whose complaint is rejected by RBS or NatWest is always notified of their right to refer the case to the Financial Ombudsman Service." FSA rules on complaint handling suggest lenders should effectively learn from the type of complaints heading their way, understand their nature and origin, and sort them.

Issuing a routine goodwill gesture seems to go against this ethos.
Plenty of lenders have been penalised for poor handling of PPI sales. Last October, Alliance & Leicester was fined £7m by the FSA for serious failings in its sales procedures. Others including Liverpool Victoria Banking services, GE Capital Bank and HFC Bank have also been forced to pay compensation.

Cashpig74

Interesting reading (above) but Im not sure it's got anything to do with my original question. I am more interested to know if banks are legally obliged to offer PPI to customers that take out loans - or at least mention about insuring the policy.

Eitherway it should be shown on the CCA that the PPi was offered and refused OR offered and accepted (in which case the financial details would be shown also I imagine).

But where does one stand if PPI is not mentioned during a loan application at all - and then PPI is not mentioned at all on the CCA??

maxdp

Cashpig74 wrote: »

Interesting reading (above) but Im not sure it's got anything to do with my original question. I am more interested to know if banks are legally obliged to offer PPI to customers that take out loans - or at least mention about insuring the policy.

Eitherway it should be shown on the CCA that the PPi was offered and refused OR offered and accepted (in which case the financial details would be shown also I imagine).

But where does one stand if PPI is not mentioned during a loan application at all - and then PPI is not mentioned at all on the CCA??

The banks are not legally obliged to offer PPI to customers that take out loans. They mention the PPI because they get huge revenue and interest from selling the policy.

They do not have to show that they have offered it as it is not a legal requirement.

di3004

Cashpig74 wrote: »

Interesting reading (above) but Im not sure it's got anything to do with my original question. I am more interested to know if banks are legally obliged to offer PPI to customers that take out loans - or at least mention about insuring the policy.

Eitherway it should be shown on the CCA that the PPi was offered and refused OR offered and accepted (in which case the financial details would be shown also I imagine).

But where does one stand if PPI is not mentioned during a loan application at all - and then PPI is not mentioned at all on the CCA??

Hi hun

There is also a useful link here for you to check out if you've not done so already, there maybe some info in regards of your query:
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance

I do know in most case before Jan 2005 these sales were not actually advised, but despite that if this was not mentioned during a loan application where the PPI was not mentioned but it was added, this was obviously mis sold, I will see if I can find more info online about this matter to give you more of an idea.

I do see your point though this should be clear on the application and shown in the paperwork agreement to give you that option, I think there have been some issues about this somewhere on these threads.

In my cases so far they were either sold on the phone or directly in the bank, even though some as as old as 2001 so they were not advised, we were just given agreements to sign where they marked for us to sign, then we would suddenly receive a copy of a agreement where there are automated crosses marked in the PPI boxes........will try to find out more info in regards of this matter.;)

(hiya Max - thanks for posting)......you beat me to it and thanks for confirming this, that little thing in my head is slow acting today) lmao X

di3004

Here is the link to a factsheet:

http://www.fsa.gov.uk/pubs/other/factsheet_sales.pdf

maxdp

:rotfl: Hi Di. You been at the Babysham again.:T

di3004

maxdp wrote: »

:rotfl: Hi Di. You been at the Babysham again.:T

lmao.......I wish.......:rotfl: :rotfl: , unfortunately its lack of sleep again , must be careful what I'm posting in case I give out the wrong info, so going back on posts just in case.......:o oops......:eek: that would not be good would it ?:eek: , glad your here now in case anything needs rectifying lol X

Cashpig74

thats great thanks for that. I'll get in contact with a solicitor or similar tomorrow for totally clairty. A Nationwide Sales Advisor has told me that PPI is offered and should always be offered by them, and in doing so it is a legal requirement for them to read the "policy statement" to me before going ahead and choosing a product or not - eitherway I must be informed by them.

But is they don't offer me an insurance product in the first place... would they need to read a statement? It would make no sense to I guess..

Hmm, will have to take this one further. Eitherway, I think by them not offering it to me, they've at least broken their own internal policy. The sales teams cannot pick and choose who they want to offer insurance to or not.