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Nationwide under fire over decade-long PPI breach

Nationwide under fire over decade-long PPI breach
Paloma Kubiak
Written By:
Paloma Kubiak

Nationwide Building Society provided incorrect information to members holding mortgage payment protection insurance (PPI) for more than a decade, the regulator reveals.

The building society failed to include vital information in annual review statements sent to scores of mortgage PPI customers between April 2012 and December 2023.

As part of industry rules, these annual reviews need to include information about the policy and the loan the policy relates to.

In one field, the Competition and Markets Authority (CMA), found that the mutual only included the mortgage element of the cover, leaving out details of any additional cover held by the customer.

The CMA said this breach was “caused by an error in the way its systems were set up following the introduction of the annual review statements”.

It added it is “concerned by the nature and duration of this breach”, as well as the “different decisions” customers could have made.

Customers could have been adversely affected

In the open letter on the issue, Alistair Thompson, director of remedies, business and financial analysis at the CMA, wrote: “It demonstrates that Nationwide had either not understood fully the systems it put in place or had not verified the accuracy of those systems fully in delivering compliance with the order.

“Moreover, this breach could have adversely affected customers. Providing customers with incorrect information on what a policy covers could have led them to make different decisions about keeping their policy compared to if they received the correct information.”

A total of 131 customers holding mortgage PPI policies were given incorrect information.

All affected customers except one have now discontinued their policies, and the one remaining customer has had the statement corrected.

Nationwide will also write to 13 former policyholders who may have taken a decision to end their PPI policy on the basis of the incorrect information.

The CMA noted that the breach was self-reported by Nationwide and that it has taken steps to end the breach and to prevent a recurrence.

It also withdrew all its PPI products in March 2024.

A Nationwide spokesperson, said: “There were a very small number of cases where some information wasn’t included in the annual review document for mortgage PPI policies.

“While there was no customer detriment in terms of any claims previously made, we have contacted 13 former customers who may have ended their policies prematurely as a result of this issue.”

Related: City watchdog: Motor finance issue won’t play out like PPI did