Northern Rock PPI - Loan alongside mortgage

[HomerJSimpson]

When the missus and I got together, we both had a mortgage and a house each.

 

We decided that the missus would sell her house and we would keep mine. After she sold her house we SAR'd Northern Rock to see how much they had ripped her off. Although we found she had indeed been ripped off, we were getting married last September and she wouldn't let me take any action against Northern Rock at that time.

 

However after the wedding and honeymoon etc I dug out the SAR from Northern Rock and wrote them the following letter (on behalf of the missus of course)..............

 

Northern Rock Request001.pdf

 

 

Mr and Mrs Simpson's place

Springfield

USA

 

26th November 2010

 

Dear Sir/Madam,

 

On reviewing the documents you sent in response to my Data Protection Act SAR I have a number of queries. I apologise for the delay in my review of your documentation and this subsequent request, but I have had my wedding to organise, a time-consuming and expensive occasion. I am now able to give this matter my undivided attention.

• You have failed to supply me with the underwriting sheets/disbursement sheets for my mortgages and personal loans. I ask you again to supply this information that is part of my SAR request.
   
  
• You have failed to supply me with details of the commissions you received for the procurement of the Payment Protection Insurance policies you sold to me. I ask you again to supply this information that is part of my SAR request.
   
  
• You have failed to supply me with all documentation relating to the discharge of my mortgage at Land Registry and the actual work involved by your staff. I ask you again to supply this information that is part of my SAR request.
   
  
• You have failed to supply me with transcripts of telephone conversations or documents relating to my enquiries about transferring my mortgage to another property. This occurred shortly before the redemption of my mortgage. Please provide these documents and an explanation as to why they were not included in my original request.
  

Loan Account xxxxxxxxxxxxxxxx

 

Your documentation states...

 

“As a responsible lender, we recommend that you seek independent financial advice to arrange payment protection cover for this loan, should this be appropriate for your circumstances.”

 

There does not appear to be any PPI affixed to this loan. Can you please explain further.

 

 

Loan Account xxxxxxxxxxxxxxxx

 

Your documentation states...

 

 

 

“Following a review of your personal circumstances during your unsecured personal loan application we have identified that you have a need for our Loanprotect insurance for the reasons stated below, if due to unforeseen circumstances you are unable to meet your loans repayments.

• For simple peace of mind that your repayments are being made
  

• You are the sole/main income earner
  
• You have limited sick pay
  
• You have no unemployment cover
  
• You have no easily accessible savings
  

Following our recommendation you have selected to protect your loan with Loanprotect Gold.”

 

There was a PPI premium of £2280.80 plus £701.68 interest payable on this policy.

 

Upon redemption I received a rebate of £1072.61 for PPI and £1168.64 for interest on the loan.

 

Unfortunately there is no breakdown of how these calculations were derived, and whether the interest element refers to the loan itself or the interest charged on the PPI.

 

As I do not have access to the systems you use to calculate these figures I would be grateful if you supply the actual documents used to calculate these figures. I also require a detailed and fully audited breakdown of how you arrived at these figures, and confirmation as to whether this PPI was a single premium preloaded at the start of the loan account, or was charged on a monthly basis. It appears to me that the rebate I received is grossly disproportionate to the premium charged.

 

Your staff recommended that my application would be considered much more favourably if I were to take Payment Protection Insurance. Your staff were aware that I was (and still am) employed by the NHS and enjoy the best pay guarantees available, were I unable to work through sickness, accident etc. My chances of unemployment are negligible unless the NHS were to cease caring for the health of the British population.

 

I therefore believe that I was unfairly coerced into taking out Insurance that I did not need, nor would have benefited from in any way. I believe this policy was sold to me for the benefit of your staff and the commissions or bonuses that they would receive for its sale.

 

 

 

Mortgage Account Number xxxxxx-xxxxx

 

Your documentation indicates that Payment Protection Insurance was being charged on my mortgage. I am unable to locate the actual documents relating to my mortgage account and the related PPI within your Data Protection Act SAR response. Please confirm as to whether you actually have a signed and dated document relating to this insurance. If you do have such a copy, please forward it to me asap. If you do not, please explain why not.

 

Your staff recommended that my application would be considered much more favourably if I were to take Payment Protection Insurance. Your staff were aware that I was (and still am) employed by the NHS and enjoy the best pay guarantees available, were I unable to work through sickness, accident etc. My chances of unemployment are negligible unless the NHS were to cease caring for the health of the British population.

 

I therefore believe that I was unfairly coerced into taking out Insurance that I did not need, nor would have benefited from in any way. I believe this policy was sold to me for the benefit of your staff and the commissions or bonuses that they would receive for its sale.

 

 

General concerns regarding Payment Protection Insurance

 

In summary I am severely concerned regarding the sale of the Payment Protection Insurance policies by Northern Rock to myself.

 

I re-confirm that I was at all material times, and continue to be, employed by the NHS. This employment affords me a comprehensive pay and conditions package that covers my salary to be paid for sickness, hospitilisation, accident leave, illness including critical illness cover, and minimal chance of losing my employment.

 

This was made clear at all times to Northern Rock staff, but it was suggested and inferred by said staff that my chances of obtaining my mortgage, and subsequent loans, were greatly increased by adding Payment Protection Insurance policies to my applications.

 

Such policies afforded me no actual benefit as I was already protected by my employment contract with the NHS.

 

Furthermore I am concerned that your staff that mis-sold these policies may not have any formal training or qualifications in the sale of such Insurance policies. Please provide proof that your staff were indeed qualified or authorised by a recognised regulatory body to sell such policies.

 

Please provide to me the proof that these policies were sold in my best interests. Please provide me with full and complete details of the commissions that you received from the sale of these policies.

 

Please demonstrate to me that the discharge of my mortgage actually cost Northern Rock £250 to process. I am aware that there is no charge at Land Registry, and am somewhat confused as to your charge of £250. I shall accept a detailed audited costings analysis that shows your actual costs to be £250.

 

 

My targets to resolve this matter

 

I would like you to provide all requested documentation and explanations.

 

If you are unable to provide suitable documentation or explanations, then I expect a full refund of....

 

• All Payment Protection Insurance premiums that were not sold correctly.
  
• All interest charges Northern Rock applied to said premiums.
  
• Discharge of Mortgage fee £250
  
• 8% statutory interest that a Court would award me for being deprived of my money, applied to all above charges.
  

I shall expect a reply from yourselves within fourteen days, as an organisation of your size has access to sufficient resources to accommodate such a request. I am well aware of my right to take my complaint to the Financial Ombudsman Service, however my preferred course of redress is the County Courts.

 

 

Yours Faithfully

 

 

 

Mrs Marge Simpson (Nee Bouvier)

Edited February 17, 2011 by HomerJSimpson

[HomerJSimpson]

Imagine her delight when she received the following letter from Northern Rock........

 

Dear Mrs Simpson,

 

Thankyou for your complaint about your PPI. I understand you believe we mis-sold you this cover when you applied for an unsecured loan with us. I am sorry you feel you have cause for complaint.

 

In line with our Internal Complaints procedure, I have reviewed your complaint and looked thoroughly at all aspects of your sales file. Included in your file is a copy of your Credit Agreement which forms the basis of the contract you have with us. It is clear, from looking at the Agreement, you signed and accepted the terms and conditions of the loan including PPI. I have also looked at how you applied for your loan when we recommended cover so you could protect your loan if you could not meet the monthly repayments.

 

I am not satisfied that our sale of PPI met all our standards of service, and I agree to uphold your complaint and refund your PPI premiums. You settled the loan before it ran its full term and made your first repayment on xx Nov 200x and the last on xx Nov xx respectively. The refund of premiums and interest is therefore not equal to the monthly premium paid (£54.28) multiplied by the number of months the loan has been in force (25). This is because we apportion more of the premium in the early part of the policy term when we bear more of the risk.

 

We have already given you an insurance rebate of £1,072.61, which was applied to your account on xx Nov 200x, and you are now due a refund of premiums and interest of £2,247.99. In addition we will pay 8% interest calculated from the date you made each payment, totalling £593.00.

 

Please sign and return the enclosed Acceptance Declaration within the next ten days. Blah Blah.............

 

Northern Rock.

 

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It seems Northern Rock are really keen to cough up.

Edited February 17, 2011 by HomerJSimpson
Links for NR's response

[dj1971]

Northern Rock are absolutely correct. The refund of premiums and insurance is not the amount of your monthly repayment for PPI x the number of months you had the loan.

 

It is the total cost of PPI when the loan was taken out, plus the total amount of interest charged on the PPI, less any early resettlement rebate you were given when you settled the loan.

 

It is really important you check your statements and see how much if any rebate your were given on the PPI when you paid off the loan.

 

There is a chance you did not get any rebate at all and this could be why they are so keen to offer you this refund.

 

Any questions with the calculations give us a shout but I highly recommend you do your own calculations before signing their acceptance letter.

 

Good luck

 

DJ