Thread: Sister V's Northern Rock

My sister took out a loan with Northern Rock in April 2003. She had PPI on it as she thought she had to. Since then she has tried to cancell it but they wouldn't let her, they said she had to pay off the loan and take out another one without PPI.

I have written a preliminary letter for her, asking for the cost of the PPI back plus contractual interest.

Thought i'd post it on here and keep you all updated with the progress.

Letter 1:

Complaints Department
Northern Rock Personal Loans
Northern Rock Plc
Selectapost 19
Rotherham
S97 3DG

My Ref: XXXXXXXXXXXX

16th November 2007

Dear Sir or Madam,

Re: Complaint and request for return of Payment Protection Insurance (PPI) premium plus contractual interest.

Account No: XXXXXXXXXXX

On the 1st April 2003 I took out an unsecured personal loan with you company of £7,000.00.

When I took it out, I signed up for Payment Protection Insurance (PPI). At the time when I applied for the loan I was only given a quote for the loan including (PPI) and was not given a quote without. I was therefore under the impression that I could not have the loan unless I agreed to take the insurance.

A short while afterwards whilst speaking with a friend, it became apparent that I did not have to have the (PPI) and was advised that if I cancelled it, that in doing so I could dramatically reduce the amount of my monthly repayments.

Taking this advice I called Northern Rock and asked if the (PPI) could be removed from my loan. I was told that it could not be cancelled from this loan, and that the only thing I could do, would be to take out another loan without (PPI) and settle my existing loan. It did not make economic sense for me to do that.

No claim has ever been made under this policy.

I now realize following the recent OFT and FSA investigations, that you mis-sold me the insurance policy, which I did not want and did not need. I believe I signed up for the insurance under economic duress and that your actions were unconscionable

I am writing to ask you to refund the premiums paid together with interest equal to your APR at the time under the accepted principle of mutuality and reciprocity.

Your responsibilities

I would draw your attention to the terms of the contract which you agreed to at the time that I opened my account. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner which complies with UK law.
I am frankly shocked that you have operated my loan account in this way as I had always reposed confidence in your integrity and expertise as my fiduciary.

No attempt was made to ascertain if the product provided was fit for purpose, suitable for my needs or if indeed if I really needed it at all. No inquiry was made as to whether I had pre-existing insurance for accident, illness or unemployment, nor were any rights to cancel these policies explained. I believe you manifestly failed in your fiduciary responsibilities and your duty of care.

Secondly, I understand under the Consumer Credit Acts and following a House of Lords judgment that you are not allowed to make a loan conditional on taking PPI unless you include the costs of PPI as part of the charge for credit and not the credit itself.
You did not do this. You added it to the total for credit and then charged me further interest on the premium on top of the interest for the loan. This is unacceptable.

Finally I believe insurance contracts are contracts uberrimae fidei (contracts of the utmost good faith) which imposes on you a “duty of disclosure of all material facts because one party is in a strong position to know the truth.” Inter alia, I believe that you should have disclosed to me that the type of policy you sold me, a single payment premium, did not give a pro-rata refund in event of early settlement. I believe you should have made it clear to me that the policies generated large profits for you. You failed to do this. I believe that you have also therefore failed in your duty of disclosure. Your failure to disclose is misrepresentation at common law.

What I require

Your concealment of the act of mis-selling has prevented me from asserting my right until now. I believe that there are strong grounds for action against you under common law, statute and consumer regulations.

The cost of the original premium was £1,645.00. This was debited from my account on 1st April 2003.

I require the £1,645.00 premium charge to be refunded.

I also require interest on the premium from 1st April 2003 to date of £571.02.

My total claim therefore, is £2,216.02

I then require that the 5 monthly payments remaining before my loan is paid in full, not to include the cost of PPI, or interest on the cost of the PPI.

I have calculated interest at 7.5% APR, which was your APR at the time I took out the loan, reflecting the principal of mutuality and reciprocity. I am sure you will advise me if the APR at the time was different.
My targets to resolve this matter

I hope that you will enter into a sincere dialogue with me about this matter and I am writing this letter to you on the assumption that you will prefer to do this than merely respond with standard letters and leaflets. I will give you 14 days to reply to me accepting, unconditionally, my request in principle and letting me know a date by which I will receive payment.

If you do not respond, or you do not respond positively, within this time period, I shall send you a letter before action giving you a further 14 days in which to reflect. I believe that this time frame is sufficient for a large company such as yours with its dedicated staff and departments. After that, there will be no further communication from me and I shall issue a county court claim at the expiry of the second deadline.

Yours faithfully,


XXXXXXXXXXXXX


Any comments, advice or support is appreciated...

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Here is a copy of the contract she has with Northern Rock.

The front and reverse are seperate images.

Front: http://i215.photobucket.com/albums/c...34/SisCon1.jpg

Reverse: http://i215.photobucket.com/albums/c...34/SisCon2.jpg

I sent a letter before action in january, and have since had a reply from NR:

They admit that the PPI was miss-sold and are therefore refunding the full amount plus interest, approx £2300.

Another one for the good guys

Please can a mod change the title of this thread to reflect a win.

Thanks

Thank you.