The great PPI reclamation

finance-boy wrote: »

Hi everybody!

I'm here today on behalf of my poor mother. She's been secretly sinking in debt for the past few years, ignoring statements, withdrawing cash on her credit card, making minimum repayments on cards with obscene interest rates, and paying for stupid insurance policies that she didn't even know she had. The stupid idiot.

Anyway, so I've commandeered her finances with a view to getting her back on track.

Phase 1 is to "stem the flow" by cutting-out any unnecessary outgoings. Upon seeing her Egg Card statement online, I was shocked to find that she'd been charged around £30 for PPI every month since 2002! (the statements don't actually go back that far, but when she rang Egg, they told her that she had taken-out PPI in 2002 when she got her card, and it has been pretty-much maxed-out ever since then). I was also shocked to find that she'd been withdrawing cash from her Egg Card. I was even more shocked to find that - despite paying-off £90-95 every month - she had been slipping a couple of pounds further into debt with every statement.

It was shocking, basically.

Anyway, she has no recollection of taking-out any PPI policy and she never checks her Egg Card statement (since it's online and she doesn't have a computer). She's been made redundant twice since 2002, and hasn't claimed on her PPI policy, so she honestly didn't know she had it. Maybe it was added without her knowledge or something?

However, there's more.

She's also been paying around £55 every month for PPI on her Halifax credit card, too. She shredded her statements for this card ("I didn't think they were important", she said), so I don't know how much exactly she's been paying out or how long she's had the card. I'd estimate that she's had it for about 2 years.

The Egg PPI has been cancelled (or rather, it will be in 30 days - "we need 30 days notice, for some reason" they claim) and she's going to cancel her policy with Halifax tomorrow.

But that's not all.

She's also been paying PPI on a loan from Lloyds TSB. The loan was for £10,000 over 7 years at 12.3% APR (total amount payable = 14,694.12). Alongside this, she was given a "Loan for Loan Protection Insurance (LPI)" of £2,777.93, which also accrues interest at 12.3% over 7 years (total amount payable = £4,081.56) (£48.59/month), so the combined total loan amount was £12,777.93 and the combined total amount payable is £18,775.68!

So what route should I take? As I said before, she's been made redundant twice since taking-out the PPI with Egg (she has notices of redundancy to prove it) and hasn't claimed on any policy. She honestly didn't know she was covered. But is that enough?

Because she has 3 separate PPI policies with 3 different companies, it seems unlikely that it was added without her consent. She probably just said "yes" without thinking about it and then forgot. Maybe she thought it was compulsory? Maybe she wasn't told that she could get it cheaper elsewhere? Maybe the cost wasn't properly explained to her? Maybe she wasn't told how completely useless PPI is? I'm sure she'd have turned it down if she knew she'd be paying £135 per month (£1620 per year!!!) for such lousy, useless "insurance".

Is there any chance at all that she can claim it back?

And, considering that her Egg statements only go back 12 months and that she's shredded most of her Halifax statements, should she ask for copies (Egg charges £2 per statement, to a maximum of £10. I don't know about Halifax) before she tries to claim the money back? Or should I trust them to repay the correct amount?

Please help me, MoneySavingExperts - you're my only hope.

(Also, sorry about the long post. I won't do it again)