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Help (please!) calculating my refund...
dazed_and_confused_3
Posts: 32 Forumite
Hi
I was hoping somebody might be able to offer some clarification of exactly how refunds are calculated.
I was recently offered a refund by Halifax but it falls short of half what I believe I am due, and the “details” they’ve provided of how the calculation was made really don’t provide much information at all - just 2 separate totals (“refund of premiums” and “interest charged on premiums”). There is no breakdown of individual charges & the interest applied on each for me to assess.
On a total of over £550 PPI charges they have added a total compound interest of only £71.12, despite these charges ranging as far back as 2001.
I have looked at the “How FOS Calculate Refunds” thread (http://forums.moneysavingexpert.com/showthread.html?t=1596473) and understand the basic principles - this is for a credit card account that is still open but the PPI has been cancelled. But I just want to check before I send my next letter to them that I correctly understand how the compound interest should be calculated. Below is an example (using one individual PPI charge) of how I have come to my own total:
PPI charge = £5.51 (24/03/04)
Given I have over 50 statements showing PPI charges ranging from £2.50 to £19.00 I cant see how they could possibly have calculated a compound interest total of only £71.12.
Or have I completely got it wrong about how to calculate the compound interest? Naturally I don’t expect anybody to take the time to go through & check my maths
, it’s more just whether or not I’ve got the basic idea of how to work out the compound interest correct.
Any help greatly appreciated/needed as I want to be certain about what I’m saying when I send my next letter. :cool:
Thanks
I was hoping somebody might be able to offer some clarification of exactly how refunds are calculated.
I was recently offered a refund by Halifax but it falls short of half what I believe I am due, and the “details” they’ve provided of how the calculation was made really don’t provide much information at all - just 2 separate totals (“refund of premiums” and “interest charged on premiums”). There is no breakdown of individual charges & the interest applied on each for me to assess.
On a total of over £550 PPI charges they have added a total compound interest of only £71.12, despite these charges ranging as far back as 2001.
I have looked at the “How FOS Calculate Refunds” thread (http://forums.moneysavingexpert.com/showthread.html?t=1596473) and understand the basic principles - this is for a credit card account that is still open but the PPI has been cancelled. But I just want to check before I send my next letter to them that I correctly understand how the compound interest should be calculated. Below is an example (using one individual PPI charge) of how I have come to my own total:
PPI charge = £5.51 (24/03/04)
- £5.51 + interest at 17.9% between 03/04 to 06/05 = £6.77 (£1.26 interest)
- £6.77 + interest at 17.95% between 06/05 to 11/05 = £7.26 (£0.49 interest)
- £7.26 + interest at 19.95% between 11/05 to 05/06 = £7.95 (£0.69 interest)
- £7.95 + interest at 22.53% between 05/06 to 11/06 = £8.80 (£0.85 interest)
- £8.80 + interest at 24.93% between 11/06 to 04/10 = £18.84 (£10.04 interest)
- £18.84 - £5.51 = £13.33 compound interest.
Given I have over 50 statements showing PPI charges ranging from £2.50 to £19.00 I cant see how they could possibly have calculated a compound interest total of only £71.12.
Or have I completely got it wrong about how to calculate the compound interest? Naturally I don’t expect anybody to take the time to go through & check my maths
, it’s more just whether or not I’ve got the basic idea of how to work out the compound interest correct.Any help greatly appreciated/needed as I want to be certain about what I’m saying when I send my next letter. :cool:
Thanks
0
Comments
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Hi there
Hopefully someone will have a look and post soon with some help on this, sorry I am hopeless and it will be wrong if left to me
LOL, good luck though.;) The one and only "Dizzy Di"
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No problem di. :cool:
Just to clarify, it's not whether or not the maths in my example is correct that I need help with, just whether or not I've understood the basic principle of how the compound interest should be calculated. Cos I just cant understand how Halifax could have calculated only £71.12 interest on a total of over £550 PPI charges!
Regards0 -
dazed_and_confused wrote: »No problem di. :cool:
Just to clarify, it's not whether or not the maths in my example is correct that I need help with, just whether or not I've understood the basic principle of how the compound interest should be calculated. Cos I just cant understand how Halifax could have calculated only £71.12 interest on a total of over £550 PPI charges!
Regards
a lot of it really depends on the status of your account over the years, for example, if you were always in arrears the compound interest on your ppi premium would be high, if you pay off your balance regularly (or close to it) your compound interest on the ppi payments would be low.
the compound interest is only calculated from the time the interest became liable on the premium and the time the premium was paid off.
so this could be correct numbers if you paid off your card regularly.I'm proud to say that the banks no longer take money from me after becoming debt free0 -
robbedofmymoney wrote: »a lot of it really depends on the status of your account over the years, for example, if you were always in arrears the compound interest on your ppi premium would be high, if you pay off your balance regularly (or close to it) your compound interest on the ppi payments would be low.
the compound interest is only calculated from the time the interest became liable on the premium and the time the premium was paid off.
so this could be correct numbers if you paid off your card regularly.
More often than not I was generally only making minimum payments. I don’t think at any point the balance was cleared/fully paid-off. And they have stated that I am due £0.00 in terms of compensatory interest at 8% for any period where my account would have been in credit had the PPI not been applied, which pretty much backs up that my account was in arrears. 0 -
dazed_and_confused wrote: »More often than not I was generally only making minimum payments. I don’t think at any point the balance was cleared/fully paid-off. And they have stated that I am due £0.00 in terms of compensatory interest at 8% for any period where my account would have been in credit had the PPI not been applied, which pretty much backs up that my account was in arrears.
in which case, if its their full and final offer and you do not agree with it you can refer your calim to the FOSI'm proud to say that the banks no longer take money from me after becoming debt free0 -
robbedofmymoney wrote: »in which case, if its their full and final offer and you do not agree with it you can refer your calim to the FOS
I will be doing that, I just wanted to check first that I hadn't somehow just got it all wrong re: how the interest should be calculated. Thanks for the advice/help. :cool:
Can I also ask whether you (or anyone else) think I could/should cash the cheque they have sent me so far so that at least I have something even if the FOS decide I'm not due any more? Or would that be considered as me having accepted their offer & the matter as being closed?
If I wrote in my response to them that I would accept their cheque/offer as a partial settlement, "without prejudice", but would be referring my claim to the FOS in order to seek the remainder of what I believe I am due, would that be advisable?0
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