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Nationwide Loan PPI Complaint Rejected
Fridlum
Posts: 6 Forumite
I complained about PPI sold on a Nationwide joint loan I took out with my partner from November 1999 to July 2002. I have never knowingly taken out PPI in my life, nevertheless, the complaint has been rejected by Nationwide. I have included the letter pretty much in full below.
I guess my cause for concern is that I did not realise that PPI had been added to the loan, despite Nationwide saying "You could see had cover as this was indicated by an asterisk (*)".
Have I cause to take the matter to the Financial Ombudsman Service?
Thanks for any help or advice on this.
The letter
Our findings:
We've carried out a full review of the complaint and the sale documentation confirms:
1. You were aware of the policy attached to your Personal Loan.
2. Eligibility to have the policy was checked and met.
3. Sufficient information was provided, at the time, to allow an informed decision to be made.
Additionally, there is no evidence to suggest a successful claim could not have been made if needed.
Documents reviewed include:
• Loan agreement
• Policy Document
• Terms & Conditions
• Welcome Booklet
At the time of the sale was employed by [company] and had been for more than 6 months.
As was the insured party, [my partner's] circumstances would not have affected [my] ability to make a claim on the PPI.
would've received 3 months full pay in the event of being unable to work. This wouldn't have affected the ability to claim, as the PPI policy would've paid out in addition to any employee benefits available, subject to a valid claim.
You confirmed could have relied on support of family to help make the repayments if needed. This reliance is not necessarily a safe option, as the financial situation of others may change. Therefore, this help cannot be guaranteed, in spite of any well-meaning offers previously made.
You have confirmed that did not have any health problems at the time of the sale.
As you were responsible for the repayments it's understandable you would consider taking out the PPI policy. Given the financial implications of being unable to work and responsible for the repayments, the decision to take the policy was a prudent one.
As the policy was sold on a non-advised basis we weren't required to confirm details of your personal circumstances or assess the suitability of the policy. The only requirement was to provide information.
A successful accident or sickness claim under the policy could've paid out for the remaining term of the Loan, or until returned to work, whichever occurred first. The policy also protected against unemployment for a maximum period of 12 months, in any one claim period, and in the event of death would've prepaid the Loan, subject to the Terms and Conditions. The policy would also have paid out regardless of any other means available.
The Unsecured Personal Loan Agreement you signed shows that 'Optional Credit Insurance' was added to the Loan.
The Loan Agreement showed the:
• amount of the Loan
• interest payable
• total amount payable over the whole term
• monthly payments
The figures for the Loan and the 'Optional Credit Insurance' were added together, confirming the insurance was a single premium policy.
There were no conditions in the Loan Agreement which implied or stated declining the PPI would have a negative effect on the Loan application or its approval. You could see had cover as this was indicated by an asterisk (*), confirming he was insured for "disability, unemployment and life". It's reasonable to suggest you read the Loan Agreement before signing it and therefore would've been aware of the insurance.
Once we received the signed Loan Agreement, the Loan was set up and a Welcome Booklet was issued providing information about the policy. We also sent a copy of the Policy Document which detailed the benefits, exclusions and Cancellation Rights of the PPI.
It was your responsibility to check whether any change to your circumstances during the life of the policy impacted its suitability.
You were under no obligation to take out the PPI as this cover wasn't compulsory and didn't form part of our Loan Terms and Conditions.
Our decision
For the reasons explained above, I can't agree the policy was mis-sold or that you all into the criteria for non-disclosure of commission, therefore no redress is due. [...]
I guess my cause for concern is that I did not realise that PPI had been added to the loan, despite Nationwide saying "You could see had cover as this was indicated by an asterisk (*)".
Have I cause to take the matter to the Financial Ombudsman Service?
Thanks for any help or advice on this.
The letter
Our findings:
We've carried out a full review of the complaint and the sale documentation confirms:
1. You were aware of the policy attached to your Personal Loan.
2. Eligibility to have the policy was checked and met.
3. Sufficient information was provided, at the time, to allow an informed decision to be made.
Additionally, there is no evidence to suggest a successful claim could not have been made if needed.
Documents reviewed include:
• Loan agreement
• Policy Document
• Terms & Conditions
• Welcome Booklet
At the time of the sale was employed by [company] and had been for more than 6 months.
As was the insured party, [my partner's] circumstances would not have affected [my] ability to make a claim on the PPI.
would've received 3 months full pay in the event of being unable to work. This wouldn't have affected the ability to claim, as the PPI policy would've paid out in addition to any employee benefits available, subject to a valid claim.
You confirmed could have relied on support of family to help make the repayments if needed. This reliance is not necessarily a safe option, as the financial situation of others may change. Therefore, this help cannot be guaranteed, in spite of any well-meaning offers previously made.
You have confirmed that did not have any health problems at the time of the sale.
As you were responsible for the repayments it's understandable you would consider taking out the PPI policy. Given the financial implications of being unable to work and responsible for the repayments, the decision to take the policy was a prudent one.
As the policy was sold on a non-advised basis we weren't required to confirm details of your personal circumstances or assess the suitability of the policy. The only requirement was to provide information.
A successful accident or sickness claim under the policy could've paid out for the remaining term of the Loan, or until returned to work, whichever occurred first. The policy also protected against unemployment for a maximum period of 12 months, in any one claim period, and in the event of death would've prepaid the Loan, subject to the Terms and Conditions. The policy would also have paid out regardless of any other means available.
The Unsecured Personal Loan Agreement you signed shows that 'Optional Credit Insurance' was added to the Loan.
The Loan Agreement showed the:
• amount of the Loan
• interest payable
• total amount payable over the whole term
• monthly payments
The figures for the Loan and the 'Optional Credit Insurance' were added together, confirming the insurance was a single premium policy.
There were no conditions in the Loan Agreement which implied or stated declining the PPI would have a negative effect on the Loan application or its approval. You could see had cover as this was indicated by an asterisk (*), confirming he was insured for "disability, unemployment and life". It's reasonable to suggest you read the Loan Agreement before signing it and therefore would've been aware of the insurance.
Once we received the signed Loan Agreement, the Loan was set up and a Welcome Booklet was issued providing information about the policy. We also sent a copy of the Policy Document which detailed the benefits, exclusions and Cancellation Rights of the PPI.
It was your responsibility to check whether any change to your circumstances during the life of the policy impacted its suitability.
You were under no obligation to take out the PPI as this cover wasn't compulsory and didn't form part of our Loan Terms and Conditions.
Our decision
For the reasons explained above, I can't agree the policy was mis-sold or that you all into the criteria for non-disclosure of commission, therefore no redress is due. [...]
0
Comments
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You can escalate to FOS if you want to.
But 'not knowing' is the weakest reason out there.0 -
It's a myth sponsored by Claim Companies that PPI was routinely added without the knowledge and permission of the customer. For loans it was on the Agreement, for credit cards it was on each monthly statement.
I guess my cause for concern is that I did not realise that PPI had been added to the loan
As the Bank pointed out to you, the PPI was clearly detailed on the Agreement which you signed.
So your "complaint" was really that you originally agreed to the insurance and have forgotten or that you simply never read what you were signing. Neither is a valid complaint.
You also apparently said your relatives would have bailed you out in the event of unemployment, but the whole point of the insurance is so that they wouldn't have to. Nor could you prove that they could afford (or be willing) to do so.
In the absence of any evidence to support your actual complaint, the Bank have examined your eligibility for the PPI policy and whether it was suitable for your particular circumstances. Finding no fault here either, they have rejected your complaint.
You have the right to refer this to the Ombudsman but. if you do, I would be emphasising that this was a single premium policy in which the PPI was added to the actual loan and so attracted extra interest. This is the aspect you should have complained about in the first place; a loan on a loan to term end with interest...
This is what you should have complained about...The figures for the Loan and the 'Optional Credit Insurance' were added together, confirming the insurance was a single premium policy.0 -
Issues against you:
1 - You are using one of the weakest complaint reasons going. Saying you didnt know you had it is not something you can prove. The documentary evidence will show you signed the agreement that showed PPI was on it.
2 - You were employed and eligible for cover
3 - you only had 3 months sick pay. So, a financial need did exist for the PPI. Some PPI doesnt pay out when there is sick pay. Theirs does. So, not a problem there.
4 - Ability to call upon relatives rarely works as a reason as you dont know their financial status.
5 - The application shows it was optional.
Indeed, the response from Nationwide seems comprehensive and accurate for the reasons given.
However, none of us here have access to the audit trail. So, are only reliant on what you are telling us. We cannot judge what the FOS will say. Although the current FOS uphold rate on PPI complaints is right down in the 20% range now.0 -
It is also worth noting that Nationwide has one of the lowest uphold rates at FOS for PPI complaints - this is because they usually keep good records and have paperwork backing their stance, the polices were deemed very good value for money, the policies had very few exclusions (i.e. they did cover PEMCs and self-employed etc)0
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So regarding "The figures for the Loan and the 'Optional Credit Insurance' were added together, confirming the insurance was a single premium policy." Is this something I can complain to FOS about at this stage? Is there a regulatory basis for this complaint? Am I likely to be successful?
(This is my first post and I'd just like to say the quality of the responses on here is fantastic. Thanks.)0 -
So regarding "The figures for the Loan and the 'Optional Credit Insurance' were added together, confirming the insurance was a single premium policy." Is this something I can complain to FOS about at this stage? Is there a regulatory basis for this complaint? Am I likely to be successful?
(This is my first post and I'd just like to say the quality of the responses on here is fantastic. Thanks.)
Yes absolutely, complain to FOS the loan was set up with an upfront single PPI premium which the regulator FCA deemed was unfairly expensive to customers and stopped from approximately 2009 onwards.0 -
Is the correct procedure to complain to Nationwide first or should I go straight to the FOS?0
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You've already received your "full and final" rejection from Nationwide, so you really have no alternative. The "correct procedure" is detailed in the FOS leaflet which will have been included with your rejection.Is the correct procedure to complain to Nationwide first or should I go straight to the FOS?
Do realise that even single premium is not as cast iron a complaint as it once was. However, it's far more compelling than the original mis-selling reason you gave....0 -
Apologies Sun but you are wrong there, it’s only considered potentially detrimental if there have been consolidation loans... even then only if the firm didn’t offer a pro-rats rebate, which Nationwide did0
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Hi Fridlum
It is worth taking it to the FOS as single premium ppi front loaded on a Loan is still a valid complaint and much better than the one you used.
You might want to write Nationwide to advise them that you intend to take it to the FOS with the new complaint, just to given them the chance to change their mind. But by no means leave it to long before you take it up with the FOS as you only have 6 months to do so from your final response.0
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