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Banks Still Breaking PPI Rules


Britain’s banks are still breaking PPI rules even after the deadline for making claims on mis-sold policies has passed.

The UK’s largest building society has been ordered to pay £2 million to more than 7,000 customers for breaches of PPI rules and two banks have had their knuckles rapped for the same thing.

The Competition and Markets Authority (CMA) have told Nationwide it must make the payments after it failed to remind some of its customers that they had PPI over a period of six years.

PPI Annual reminders not being sent

CMA rules require lenders to send annual reminders to customers that they hold PPI products, telling them how much they’re paying for them and reminding them that they have the right to cancel.

A CMA investigation found that the society had failed to send the letters for six years and had also sent wrong information about premiums paid to customers who had Lifestyle Protector policies.

Failing to send the reminders between 2012 and 2019 prevented the customers from either cancelling their existing policy or shopping around for a new one.

Legal Obligations Not Being Met

Adam Land of the CMA said: “Nationwide has broken the rules by not sending essential PPI reminders to their customers. Eight years on from our legally-binding Order, it is simply unacceptable that the CMA is having to remind Britain’s biggest banks of their legal obligations.

“Nationwide has failed its customers by denying them important information and the directions we’ve issued today will lead to affected customers receiving the refunds they deserve. Such breaches are serious and, if we had the extra powers we’ve proposed to the government, could have resulted in fines.”

Giving Nationwide’s response spokeswoman Sara Bennison said: “Unfortunately, in these cases, the society failed to send out an annual review or sent one with incorrect information. The society has rectified the issues and is in the process of providing redress to affected customers. On this occasion we fell below our usual high standards and for this, we apologise.”

Who’s breaking the rules?

Nationwide was not alone in breaking the notification rules. The CMA has also issued warnings to the Royal Bank Of Scotland (RBS) and Santander for similar rule breaches. They and Nationwide have been ordered to appoint an independent auditor to examine their PPI processes.

RBS is in the process of paying back £1.5 million to 11 million customers who did not get their notices for six years. Santander sent more than 3,400 of its mortgage PPI customers’ annual reminders containing incorrect information to over a five-year period, but they were not financially impacted by the error.

A £6 million cost for Nationwide this time

Nationwide have been caught out a second time with a string of omissions and this time it’s cost them £6 million in repayments to customers

Around 320,000 customers will share in the rebate because they did not receive text warnings that they were about to slip into an unauthorised overdraft. They will now receive back the overdraft charges they were wrongly charged.

CMA Involvement in complaints

The CMA were involved again and said that in the majority of cases complained of Nationwide had not made it clear that customers could end up being charged if they didn’t take action.

Spokesman Adam Land said: “Nationwide failed to do this on numerous occasions and our action today makes it clear they must fix this as a matter of urgency. It is imperative that these problems are sorted out immediately and that they don’t occur again.”

Nationwide responded: “We have implemented improvements and additional controls to ensure this does not happen again. These controls are currently being reviewed by independent third parties.”

Sources:
https://www.mirror.co.uk/money/breaking-nationwide-ordered-pay-customers-20647476
https://www.ft.com/content/b5dad852-f19e-11e9-bfa4-b25f11f42901
https://www.thesun.co.uk/money/10163603/nationwide-to-pay-2million-ppi-reminders/
https://www.moneysavingexpert.com/news/2019/08/rbs-and-santander-ordered-to-fix-ppi-processes—after-not-sendi/
https://www.bbc.co.uk/news/business-49278070
https://www.yourmoney.com/saving-banking/nationwide-to-refund-6m-to-current-account-customers/

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