Co-op bank ppi

Hi PF, going to do it all again tomorrow using "12" repayments and see what we come up with. Hold on in there.;) Too tired now but BRB.

You actually paid over to them 1324.20 (12 x 110.35) + 4310.38 (using rule 78 calculator) - rebate of insurance 514.53 = £5120.05 (their figure £5203.09);) (getting there)



If you had not had PPI it would look like this

You actually paid over to them 89.15 (being what the repayment would have been WITHOUT PPI) x 12 = 1069.80 + 3482.33 (settlement using rule 78) totalling £4552.13 (4643.45 their figure)



5120.05 - 4552.13 = £567.92 (My figures 12 months)
5203.09 - 4643.45 = £559.64 (Their figures if they were taken away correctly)
Difference of £8.28
5203.09 - 4643.45 = £467.50 (:eek:FROM THEIR CALCULATIONS WHICH I ASSUMED CORRECT BUT INCORRECT)



I think they have just simply got the A) MINUS WRONG and also it works better using 12 months and is VERY close except they obviously cannot do a simple sum. Can you confirm their sum of a) minus b) with them???? If they did this correct then your redress would be NEAR enough correct. I have done 12 MONTHS in calculations but surely the bank can see they have done a simple "SUM" wrong. I think the "actual" amount of the redress is correct.

Right as regards how FOS calculates refunds we will put your figures into here to double check

Loan and PPI policy terminated early before FOS decision.
Overall loan was for £4951.11 (monthly payments £110.35) – but it would have been £4000 with monthly payments of £89.15 without PPI. Policy term was 60 months; loan and policy cancelled are 12 monthly payments.
Borrower was required to pay £4310.38 - 514.53 = 3795.85 to settle the loan (after the business had taken account of the rebate of premium he was due of £514.53; but if he had not had PPI added to loan, the smaller loan of £4000 would have cost £3482.33 to settle at the same point.
So borrower had paid lender £21.20 a month more than he would have done, had the financial business not mis-sold the PPI policy; and £313.52 more to settle the loan after 12 months.
· Return 12 monthly payments of £21.20 to date of settlement (254.40)
· Calculate difference between settlement costs incurred when borrower ended loan early and those he would have incurred had he settled the loan without the additional PPI element. (£3795.85 - £3482.33 = £313.52) pay difference to borrower.
· Add interest to each payment of £21.20 at 8% simple, from date that excess was incurred.



If you add up the £254.40 and the difference of £313.52 = £567.92 (WHICH AGAIN IS EXACTLY AS MY ABOVE FIGURES SO AGAIN PROVES IT TO BE CORRECT) which is what the redress should be according the FOS method above BUT co-op do not pay usually on the 8% simple for each repayment FROM DATE repayment was made to todays date. They simply work out your redress and then add 8% from the date the loan was redeemed to todays date.

PF - YOU COULD KNOW THIS FOR CERTAIN IF YOU SETTLED THIS LOAN WITH AN AMOUNT OF £3795.85 OR THEREABOUTS. IS THERE ANY WAY OF CHECKING THIS.

pompeyfaith wrote: »

Marshallka,

Thanks for this just one question now then.

So going by the above calculation you ave kindly done and this is what is confusing me

They gave a rebate o the PPI in march 2003 of £514.53 but the policy cost was £951.11 so where has the difference between those two figures of £436.58 gone.

Surely if they have made a financial wrong all of the policy cost should have been returned to the loan because otherwise they would have kept some which ok if i cancelled it but i did not t was a finacial wrong due to a medical condition.

Take my current loan the PPI was £1,511.27 but they have only returned £914.20 to the loan I do have computer screenshots of this.

How can it be right that they keep £597.07 surely that must be returned to the loan too otherwise the loan settlement will be wrong?.

Regards

PF

Hi PF, the total cost of your PPI had the loan ran its course would have been 21.20 x 60 totalling £1272.00. This amount would have been added to your other loan (as PPI is actually another loan) and then you repay it monthly. As you settled it early you have a rebate which was 514.53 so although you had paid 12 x 21.20 off the 1272.00 there was still another 1017.60 owing. You also got a statutory rebate using rule 78 on the "interest" element of the PPI. You never actually got charged any more than that of the £597.07 for the PPI over the whole period you had the loan. You were rebated for the PPI and rebated for the interest.

It works like this PF. You have a loan to pay the PPI over to the insurer. You then have paid in full for a service (lets call it that) and you have borrowed the money from your bank for this. This "loan" for the PPI is then treated like any other loan. You owe it and if you settle it early then you get a rebate according to whatever regs were used at the time of the interest due on the loan. (Yours being rule of 78 which is a very costly method of settling ANY loan let alone PPI) BUT Co-op are not as bad as some..... some actually do not rebate anything on the policy like co-op do .



Here are the figures for your loan if you did not have any PPI again


You loaned an amount of £4000 over 60 months. This was repaid at 89.15 a month but you settled it after 12 months and the settlement would have been according to rule of 78 (NOT the new method and this is where the problem lies) £3482.33.

The total charged for your loan was 89.15 x 12 = £1069.80 plus
The amount of your settlement being £3482.33 so it WOULD have been £4552.13. You actually had £4000 and the rest was charged cause of rule of 78 and interest for borrowing the money over 12 months.

Now again the loan and cost WITH the PPI

You loaned £4951.11 over 60 months. This was repaid at £110.35 a month but you settled after 12 month and the settlement would have been according to rule of 78 £4310.38. However, you did not pay to them £4310.38 as they gave you a rebate of £514.53 so you actually gave to them £3795.85.

The total cost of your loan with PPI was 110.35 x 12 = 1324.20 plus the amount you settled the loan with being £3795.85 totalling £5120.05.

If you take the total cost of the loan with the PPI being £5120.05 away from the total cost of what the the loan WOULD have cost without the PPI being £4552.13 you get a difference that you ACTUALLY PAID OF £567.92.

You never actually paid all the PPI to them. You got it rebated (as you can see) with the rule of 78 for the interest and then they take away a good amount for rebate they give on the actual policy.

Its actually rule of 78 that has stung you here PF and not the PPI. You current loans would be rebated much different to this since rule of 78 was abolished.

PF, this is the only reason that the loan is wrong for the one you posted up that I can see other than the extra few quid and its this simple subtraction here....

Total paid inc PPI to 25/03/2003 £5203.09
Total would have paid without PPI £4643.45
Difference A) - £ 467.50

Where they say difference of a) and b) its not correct. It should have been £559.64.