MSE News

1,000s of Nationwide customers owed refunds after PPI breaches

1,000s of Nationwide customers owed refunds after PPI breaches

Nationwide will pay an estimated £2 million in refunds to about 7,000 PPI customers, after it failed to send them important information. 

The Competition and Markets Authority (CMA) requires firms to send annual reminders to customers who have PPI, setting out how much they've paid for their policy, the cover it gives them, and telling them they have the right to cancel. 

But Nationwide broke this rule by failing to send reminders to some credit card customers with PPI, while others who had its 'Lifestyle Protector' insurance policy were sent incorrect information about their premiums.

This meant customers didn't have full information about their policies, which could have prevented them from looking elsewhere to find a better deal. 

Affected credit card customers should have already received their refunds, and affected Lifestyle customers will be refunded by May 2020. Nationwide has also been ordered to appoint an independent body to audit its PPI processes. 

The CMA also ordered RBS and Santander to fix their PPI processes this summer, after the banks failed to send, or sent inaccurate, annual reminders. 

See our PPI: Can I still reclaim? guide for more information. 

What went wrong? 

Nationwide says the breaches were due to two separate "system issues", meaning that: 

  • About 1,000 credit card customers weren't sent annual reminders. This error occurred between 2012 and 2017. 

  • Around 6,000 Lifestyle Protector customers were sent inaccurate reminders. This happened between 2012 and 2019. Affected customers' statements showed premiums for 11 months rather than 12, meaning premiums appeared to be cheaper than they actually were. 

I'm a Nationwide PPI customer – what should I do?

Nationwide says that credit card customers should have already received their refunds.  

It's now in the process of refunding Lifestyle Protector customers and says they should all have been refunded by May 2020. 

Refunds will be paid directly into the account customers use to pay their PPI premiums. If you've closed your account, you'll be sent a cheque. 

What does Nationwide say? 

Sara Bennison, chief marketing officer at Nationwide, 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."

What does the CMA say?

Adam Land, senior director of remedies, business and financial analysis at 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."