RBS Credit Card PPI increased debt over 16 years!

gossfam1

Hello all,

After running a check report for my wife and I before we applied for a new mortgage, I have discovered a credit card she had some knowledge of, but buried her head in the sand about - cue long 'discussions'!

This is a card that was taken out in 2002, spent on and then stopped using about 18months later. The minimum payment was always taken each month from here bank account.
However the card came with PPI, which she didn’t realise at the time and certainly had no idea about more recently. From what I have established so far, the PPI premium was added to the card balance each month, but the minimum payment was not sufficient to pay of the interest along with the PPI, so each month the card balance was increasing. My wife mistakenly thought that so long as the minimum payment was made each month the card would eventually be paid off.
The credit report shows the balance of £1000 in 2012 in increasing to £1200 in June 2018, despite payment of £26 ish per month being paid.

If the PPI had not be added to the balance each month and the minimum repayments of 2.25% made, the card would be nearing full repayment now.

So my question is, there is clearly a case of PPI mis-selling here, as my wife was clear she never asked for PPI, nor even knew she had it. But is there also a case for RBS to answer why they didn’t increase her monthly payments to cover the PPI, as it’s surely not ethical for the bank not to ensure the minimum repayment will eventually pay off the debt. If I had not discovered this now, the debt would have never been repaid and be forever increasing, unbeknown to my wife who was merely meeting her minimum repayments and assumed so long as she didn’t ‘spend’ any more on the card, the monthly repayments would eventually clear the card balance.

Any thoughts, is this common, have others also had this happen to them?
Many thanks,
A

[Deleted User]

As the card was opened prior to the change in minimum payments of 2010, there was no requirement for them to increase her minimum payments.

Each of her statements over the last 16 years would have shown the minimum payments and changes in balance.

dunstonh

So my question is, there is clearly a case of PPI mis-selling here, as my wife was clear she never asked for PPI, nor even knew she had it.

Those are potential complaint reasons but they are weak reasons. Very few complaints succeed on those reasons alone. Mainly as anyone can say that years later even if they did know. What evidence points towards those allegations being correct?

But is there also a case for RBS to answer why they didn!!!8217;t increase her monthly payments to cover the PPI, as it!!!8217;s surely not ethical for the bank not to ensure the minimum repayment will eventually pay off the debt.

Rules changed, as answered above. However, she has had 16 years of statements telling her this.

Any thoughts, is this common, have others also had this happen to them?

A lot of financial products work well if they are managed correctly. A lot of them fail when the person buries their head in the sand. A failure due to that does not mean the financial firm is wrong.

By all means, make the PPI complaint. Try and think of something better as the reasons though. Most upheld complaints succeed due to eligibility or suitability (as well as auto payouts). So, is there an issue there you can use?

[Deleted User]

gossfam1 wrote: »

So my question is, there is clearly a case of PPI mis-selling here, as my wife was clear she never asked for PPI, nor even knew she had it. But is there also a case for RBS to answer why they didn't increase her monthly payments to cover the PPI, as it's surely not ethical for the bank not to ensure the minimum repayment will eventually pay off the debt.

As above, there was no regulatory requirement for the Bank to increase minimum payments so a complaint about Bank "ethics" would go nowhere.

In addition, the PPI would have appeared on every monthly statement in which it was charged so your wife should have spotted this additional payment if she didn't agree to it. After sixteen years of paying the PPI, it is stretching credibility to complain that she never agreed to it. The Bank will have signed documentation showing that she did agree to it.

So there is not "clearly" a case of PPI mis-selling here, but you certainly won't be the first to complain on the basis of not knowing about or agreeing to the insurance. You may well get a refund, but that is far from a cast iron certainty.

gossfam1

dunstonh wrote: »

Those are potential complaint reasons but they are weak reasons. Very few complaints succeed on those reasons alone. Mainly as anyone can say that years later even if they did know. What evidence points towards those allegations being correct?

I would argue that if in 2018 if you are still paying PPI premiums despite the huge public awareness of potential mis-selling, then you would more likely not be aware you had the product. Especially if you are now in a well paid stable job and have been for the last 15 years.

dunstonh wrote: »

Rules changed, as answered above. However, she has had 16 years of statements telling her this.

She moved, and hasn't received a statement since 2005.

dunstonh wrote: »

A lot of financial products work well if they are managed correctly. A lot of them fail when the person buries their head in the sand. A failure due to that does not mean the financial firm is wrong.

Absolutely agree. However this was a debt that had not been added to by her since 2004, yet for over 14 years was increasing. Surely the bank has a duty of care to ensure the money it lends can be paid back in a sustainable way. The key fact for me in this is that it's own charge for PPI was making the repayments untenable.

dunstonh wrote: »

By all means, make the PPI complaint. Try and think of something better as the reasons though. Most upheld complaints succeed due to eligibility or suitability (as well as auto payouts). So, is there an issue there you can use?

I would have thought the fact that she was in stable long term employment, with savings and had no knowledge of this product would have made a clear mis-selling case for itself?

gossfam1

Moneyineptitude wrote: »

As above, there was no regulatory requirement for the Bank to increase minimum payments so a complaint about Bank "ethics" would go nowhere.

Maybe so, I want to get a copy of the current terms and conditions of credit card in question, as surely banks have to update them in line with new requirements and regulation. Whilst I'm sure there was few 'ethical' banks - The question for me is when would the bank have taken action to deal with an increasing debt over 14 years..one could imagine this continuing for further decades and the debt becoming tens of thousands..

Moneyineptitude wrote: »

In addition, the PPI would have appeared on every monthly statement in which it was charged so your wife should have spotted this additional payment if she didn't agree to it. After sixteen years of paying the PPI, it is stretching credibility to complain that she never agreed to it. The Bank will have signed documentation showing that she did agree to it.

She moved and due to 'head in sand' didn't want me to know, so didn't change the address when we moved in together. So didn't receive any statements from 2005 onwards, but assumed that by paying the minimum amount each month and not spending, this would clear the debt - and it would have if PPI hadn't been added each month.

Moneyineptitude wrote: »

So there is not "clearly" a case of PPI mis-selling here, but you certainly won't be the first to complain on the basis of not knowing about or agreeing to the insurance. You may well get a refund, but that is far from a cast iron certainty.

Surely the whole mis-selling scandal is about the fact that this product was added to customer accounts without their knowledge (yes in her case), it was not required if you had other means or savings to pay for the debt (yes in her case) and you were unlikely to need this cover if you were in stable long term employment (also yes)

[Deleted User]

gossfam1 wrote: »

I would argue that if in 2018 if you are still paying PPI premiums despite the huge public awareness of potential mis-selling, then you would more likely not be aware you had the product. Especially if you are now in a well paid stable job and have been for the last 15 years.

That's very spurious logic. There was no way to know fifteen years ago that she would not be made redundant from her "well paid stable job". That's the whole point of insurance, to protect against the possibility of the worst happening. You don't get the premiums back just because you haven't needed to claim on the policy.

You also need to be aware that, while PPI was indeed widely mis-sold, it's not somehow wrong simply to have the insurance and it's not an automatic certainty that it will be refunded simply because you have recently "discovered" it.

gossfam1 wrote: »

She moved, and hasn't received a statement since 2005.

That still means that she received statements with PPI itemised on a separate line each month for THREE years. So thirty plus statements for her to realise that she was paying for something she now says she never wanted or agreed to?

gossfam1

Moneyineptitude wrote: »

That still means that she received statements with PPI itemised on a separate line each month for THREE years. So thirty plus statements for her to realise that she was paying for something she now says she never wanted or agreed to?

Whilst this is true..I would argue that if you viewed a statement with "interest charged" and "PPI charged" would you really question was this was for in 2003/4/5 ? What if you had no idea what it was and just assumed you had to pay it as it was on the statement as a charge?


I would argue you are now viewing this in 2018 as something you could reject or opt out of, where as in 2002-05 you would assume it was just part of the charge of having the card or using the credit facility.

[Deleted User]

gossfam1 wrote: »

Surely the whole mis-selling scandal is about the fact that this product was added to customer accounts without their knowledge

No. The mis-selling scandal is largely about (lack of) eligibility on the part of the customer. PPI was a rubbish product, but that in itself does not make it mis-sold.
It's a myth sponsored by claim companies that PPI was routinely added to finance without the full knowledge and permission of the customer. PPI on loans appeared on the (signed) Agreement,on credit cards it would be on every monthly statement in which the account had a balance and on mortgages it would be clearly stated on the documentation too.

As Dunston said earlier, you really should appraise yourself of what constitutes mis-selling and look for far stronger complaint reasons than those you have given

gossfam1 wrote: »

.I would argue that if you viewed a statement with "interest charged" and "PPI charged" would you really question was this was for in 2003/4/5 ?

Certainly would have if I didn't want or agree to it. Again, not a valid "argument".

dunstonh

The question for me is when would the bank have taken action to deal with an increasing debt over 14 years..one could imagine this continuing for further decades and the debt becoming tens of thousands..

Why do you think the bank needs to do anything?
it is the responsibility of the individual to control their spending. Unless there is a mental illness, they are providing a service that the customer has asked for and is using.
Each statement gives the warning about making a minimum payment.

She moved and due to 'head in sand' didn't want me to know, so didn't change the address when we moved in together. So didn't receive any statements from 2005 onwards, but assumed that by paying the minimum amount each month and not spending, this would clear the debt - and it would have if PPI hadn't been added each month.

That is not the fault of the bank. She breached their T&C by not keeping the address current.

Surely the whole mis-selling scandal is about the fact that this product was added to customer accounts without their knowledge

And if she can prove that, then the complaint would be upheld. However, chances are there is no evidence to suggest that was the case.

it was not required if you had other means or savings to pay for the debt (yes in her case)

That is contradictory. She had a debt she was burying her head in the sand about but now you are saying there are savings that could be used to cover the debt. So, why would someone bury their head in the sand over a debt they can easily cover?

and you were unlikely to need this cover if you were in stable long term employment (also yes)

That is not a common missale reason. Very many stable jobs have been lost over the years.

gossfam1

Moneyineptitude wrote: »

No.
Certainly would have if I didn't want or agree to it. Again, not a valid "argument".

So you're saying that as it was listed on a statement and it wasn't questioned at the time by her, then this is taken as consent?
Even on the main information pages of MSE, it talks of even having PPI is likely a case of mis-selling.



I say again, my wife had no knowledge of this product, did not request it, did not require it, did not know was it was for, and yet this is not considered mis-selling?



The ironic thing is that even in the unlikely event that she had been made redundant and not been able to make the card repayments, she wouldn't have been aware that this cover (might - who know) have paid out and so wouldn't have even been able to derive benefit from it as she was unaware of it.


I'm sorry if I'm coming across as naive, but I'm so angry this could have happened, at both my wife and the bank.