PPI Claim Rejected by Nationwide

tony6403

In 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 If you found the conditional nature of the policy to be unacceptable you could have rejected the offer and withdrawn your application for the mortgage.You were free to look elsewhere.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 ?

Agricolae

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!

[Deleted User]

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?

[Deleted User]

Agricolae wrote: »

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!

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

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.

tony6403

Deleted_User wrote: »

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?

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..

-taff

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.......

[Deleted User]

tony6403 wrote: »

Because to effect any insurance it is a prerequisite that you must be eligible for it. In short, stating the obvious.

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

Moneyineptitude wrote: »

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?

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.

[Deleted User]

tony6403 wrote: »

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.

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

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.