First Direct Flexiloan PPI Refund Refusal

Ignite

Hi,

Sorry for the long post.

I made a complaint to First Direct last month about mis selling of their PPI product to me on a Flexiloan I took out in 1997. Today I received a refusal letter and final response. However it has raised some contradictions in what they have said and what they have sent.

Background.
When I took out the Flexiloan, I was working as a temp for an agency filling a vacancy that their client was in the process of filling. I was in need of money to cover my travelling expenses at the time (over an hours train journey) which I had to pay up front and then reclaim at the end of each month. I had reached my OD limit and called to ask the bank for help. The Flexiloan is the product they provided me with. When I applied for the help, they were told in no uncertain terms why I needed the money and that I was working for a temp agency. I was told that I had to take up the PPI to get the loan, especially as I was in a temporary role.
As it happened, I was taken on to full time work in another role by the company I was placed into by the temp agency so I didn't need to claim on the PPI.

Complaint.
I sent in the FOS questionnaire and stated that I had been told that I had to take up the PPI to get the loan. Also I found out when reviewing the Policy Document that had I tried to claim on the PPI at the end of my temp work, I would not have been covered due to the exclusion for "Unemployment after a period of casual, temporary or occasional work" This was also stated in the complaint.

The Response.
FD sent a final letter stating that they "Established eligibility for the FPP (PPI) by confirming you were a resident in the United Kingdom, in paid employment for a minimum of 16 hours per week and aged over 18 and under 65." They also say "Our records confirm you were eligible for the cover at the time" Also "We didn't provide any advice, or give any recommendations regarding the FPP, therefore the responsibility of ensuring the product was suitable for your personal circumstances was left with you"
They have sent me a copy of my original application form with my signature. On the form under the Flexiloan Protection Plan section, it states "First Direct Flexiloan Protection Plan is specially designed to protect your loan repayments if accident, illness, unemployment or death prevent you from being able to pay them yourself. We recommend that you take out this valuable protection.
They have also sent out another blank form that they state is the Flexiloan Agreement (they say they don't have the original) and this uses the term optional credit protection insurance and was apparently sent after my application was sent back to them.

Issues.
They have stated that they "Established Eligibility" however, if I was in temporary employment and they knew this at the time, they didn't properly establish eligibility. This shows lack of duty of care in establishing this eligibility. Also they stated that they didn't give any recommendations. However, the application form uses the statement "We recommend that you take out this valuable protection" in relation to the PPI.

If I now make a complaint to the FOS, am I barking up the wrong tree or is it worth a go?

Thanks

dunstonh

I sent in the FOS questionnaire and stated that I had been told that I had to take up the PPI to get the loan.

That allegation rarely wins any complaints.

Also I found out when reviewing the Policy Document that had I tried to claim on the PPI at the end of my temp work, I would not have been covered due to the exclusion for "Unemployment after a period of casual, temporary or occasional work" This was also stated in the complaint.

They appear to be saying that they would have covered you.

Also they stated that they didn't give any recommendations. However, the application form uses the statement "We recommend that you take out this valuable protection" in relation to the PPI.

That is not advice and smacks of desperation.

If I now make a complaint to the FOS, am I barking up the wrong tree or is it worth a go?

The FOS will disregard your verbal allegation as its unprovable. They will ask FD if they would have paid out as they suggest. If they say yes, then your complaint is stuffed. If they say no then your complaint wins. Your advice opinion is a no-goer as they dont give advice. A document saying they recommend something is not advice.

So, it boils down to the temporary employment thing. I would have complained on the basis of single premium with interest added as well but it may be too late to introduce that now. If you think you are right on the employment front then take it to the FOS.

magpiecottage

dunstonh wrote: »

I would have complained on the basis of single premium with interest added as well but it may be too late to introduce that now.

The firm should have considered that anyway. I suggest the OP goes to FOS and adds it to the complaint. FOS may pick up on it without doing so but better to draw it to their attention and better to go now than spend the entire six month window of opportunity to do so arguing the toss with the firm.

Ignite

Slight problem with adding a "single premium with interest" argument to the case. It wasn't a single premium with interest but a monthly premium.

chila

Hi all, first post, though I have been reading this for years!!!

I have spent 4 years trying to get refunds (I am self employed) so first of all has anyone who is self employed had success with Egg, Marbles, or Barclaycard - have had a payout from Halifax but refused by Marbles, in same banking group and also Barclaycard.

Not disheartened, I have asked both to explain why, when the Financial Ombudsman has posted case studies showing that they will uphold complaints from the self employed!!!

I have also written to loads of third parties claims companies to ask what success they have had - that should be interesting reading!

To my main point - I have had a flexiloan account for over twenty three years - and there has been a ppi on it for the full time - called something else and i didn't even realise this until a few weeks ago! Stupid or what? Anyway, wrote to HSBC in January, got a reply on Friday with an offer of the return of 6 years ppi and interest at 8%. Good result eh?

Hmm, except the payments of the PPI or not a single payment premium, but a regular payment premium, though a fixed amount each month regardless of the balance, and deducted from my current account, with resulting interest when my current account is in arrears, and of course interest on the flexiloan account when in debit (works as a kind of overdraft not a loan). Hope I am not boring you all yet, but it seems to me therefore that I am entitled to refund of interest, any charges and COMPOUND interest on PPI paymenst - a PPI on a credit card, being a regular payment premium, works this way, ie returning the customer to a position where he would be if he hadn't made the PPI payments, and the 8% gross simple interest would also apply if the return of monies created a credit balance. Think that's right, and my thinking comes from the Ombudsman case studies.

Has anyone had PPI on a flexiloan reimbursed via the Ombudsman, if so how was it calculated?

BTW have sent off for info re statements prior to 6 years, but I also have 20 years of statement lurking in the attic if that fails, so at least I can provide PPI payments confirmation that far back!

Ignite

I'm pleased to say that FD reconsidered their response and upheld my complaint. The lady I spoke to said that their first response was not correct and that I would have not been paid under the PPI policy if I was out of work. Also she agreed that since the "Recommend" was in writing that it was a recommended policy. I've now had about £750 back, some of which is now sitting in a savings account ready to send the tax man .

dunstonh

Well done.