The competition regulator has written to Nationwide after it was revealed it provided incorrect information to payment protection insurance (PPI) customers.
The Competition and Markets Authority (CMA) has issued a letter to the world’s largest building society after it found it had breached Article 4 of the Payment Protection Insurance Market Investigation Order 2011 by providing incorrect information to PPI customers.
The watchdog stated that Nationwide provided incorrect information in one field in the annual review statement for 131 customers over a period of around ten years.
This occurred between April 2012 and December 2023 for customers holding mortgage PPI policies with the bank. The field in question provided the amount of monthly payment covered by the policy only contained the mortgage element of cover. Any additional cover the customer held was not included in that field.
The breach was self-reported by Nationwide.
The CMA found that the breach was caused by an error in the way its systems were set up.
In a letter to the bank, the regulator said it is “concerned by the nature and duration of this breach”, stating 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.”
However, as the bank in the regulator’s eyes, has “taken steps” to end the breach and to prevent a recurrence, it does not consider it appropriate to take formal enforcement action.
One of these stops included the bank withdrawing all its PPI products in March as it exits the PPI market.
“The breach was caused by an error in the way its systems were set up following the introduction of the Annual Review Statements”, it said.
The bank has also written to 13 former policyholders who may have taken a decision to end their PPI policy on the basis of the incorrect information.
It is also currently gearing up for the UK’s biggest banking tie-up since the financial crisis as it looks to finalise a £2.9bn deal to buy high street rival Virgin Money in the coming weeks.
The PPI scandal has been drawn out for years after it was established that millions of Brits were mis-sold PPI policies after taking out loans and credit cards from the early 1990s to 2010.
Several banks have been reprimanded by the regulator over the years including Barclays being ordered to pay up to £1m in compensation to at least 1,000 of its customers in 2022.
The bank was contacted for a comment.