Lender criticised for payment protection insurance pullout
MORTGAGE STRATEGY - 27TH AUGUST 2007
Nationwide has been criticised for "shutting the stable door after the horse has bolted" after temporarily pulling its payment protection insurance products because of unsatisfactory sales processes.
The society recently stopped offering payment protection insurance on secured loans and credit cards following an internal mystery shopping exercise.
A spokesman for Nationwide says: "We've decided to temporarily withdraw from selling payment protection insurance after we discovered our processes weren't as robust as we would have liked. We will now concentrate on staff training and competence but we're still offering mortgage payment protection insurance."
Nationwide says the decision was not a result of a Financial Services Authority order.
But Simon Burgess, managing director of Britishinsurance.com, says: "Nationwide should have ensured it had the right protocols in place to make sure its payment protection insurance sales processes were robust from the start. Pulling out after a mystery shop is shutting the stable door after the horse has bolted, because consumers may have already suffered."
A spokesman for Moneyfacts.co.uk says: "It has to be seen as a positive step that lenders are using internal mystery shopping exercises to vet their sales. But Nationwide must have uncovered substantial shortcomings to withdraw from the market."
The Nationwide spokesman adds: "We thought it was best for consumers to stop selling payment protection insurance and retrain staff rather than continue to trade through the problems."
