PPI Reclaiming discussion Part III

marshallka

I bet this is what the Ombudsman will doing with Firstplus here if the poster on CAG was correct!!

dealing with mass actions

The regulator can use its powers to require firms to review past business - either all sales or particular blocks and to compensate customers who can be identified as having suffered loss. This of necessity means that the regulator has to set out not only those who are liable to be compensated but also a prescription for compensation. This has proved quite a contentious and difficult task, both in the pensions review and in endowment cases. The standards prescribed for compensation on a mass basis may not be those that a court would use in a single case. Courts are never presented with the full range of cases out of a mass series of wrongs. In multi-party actions the best that solicitors have been able to do is to ask the courts to rule on three or four test issues in a single action. But regulators and ombudsmen are frequently asked to contemplate a large range of issues resulting from a series of wrongs.

marshallka

This is what i have queried with the Ombudsman here

Q5. If a term of the contract is unfair does this invalidate the rest of the contract?
The fact that an unfair term is unenforceable does not mean that the rest of the contract is void, unless it is unworkable without the unfair term.

Still waiting for reply to this one!

marshallka

This is about unfair contract terms and the Ombudsman
The FSA statement specifically refers to terms that charge policyholders a disproportionately large sum if they do not fulfil their obligations under a contract, or if they cancel it. We share the view that giving consumers the right to cancel – and then penalising them financially for exercising that right – is likely to be unenforceable in law, as well as unfair and unreasonable.

If this type of complaint is against the underwriters of the Policy then it comes under compulsory jurisdiction by the Ombudsman as these Insurers were part of the old Insurance Ombudsman Scheme....

marshallka

Standard setting
The terms of reference of the Insurance Ombudsman, to be mirrored in the rules
of the new Financial Ombudsman Service, require the ombudsman to consider
the terms of the contract, the applicable law, the general principles of good
insurance practice, the ABI’s Statement and codes of insurance practice; and to
assess what solution would be fair and reasonable in all the circumstances

This was what the Insurance Ombudsman could look into so I cannot see a problem with my complaint against the Insurer. Surely the Ombudsman sees that it is wrong to charge the amount they did do for an insurance policy that was no longer of use to us. Their term was so unfair. I just hope that I have a case..this was not fair and also not reasonable.
How is anyone likely to know that this term here is taking the whole amount of the policy including the interest and rebating a tiny prooportion back. It should not have been allowed

Termination of Cover and Benefit
If you cancel your policy before its normal expiry date you will receive a rebate of your premium provided you have not made a successful claim. Your insurers will not calculate your rebate proportionally, rather under the Rule of 78 set out in the Consumer Credit Act 1974.

marshallka

from the Competition commission report


The rule of 78 in rebates on insurance

1. 
   
2. The rule of 78 rebate method treats the insurance premium as ‘front loaded’ (ie a higher proportion of premium is allocated to the earlier periods of the policy). If a policy is cancelled part of the way through its term, the rebate payable therefore represents a lesser proportion of the full single premium than the unexpired term bears to the full term of the policy. Figure 1 shows the percentage of the initial premium that is given back to customers cancelling the PPI during the term when the rule of 78 is used to calculate the rebate. The example is based on an HSBC17 PPI policy with an initial premium £846.49 covering a £5,000 loan over a 36-month term. In some cases, certain providers charge an additional retained premium on cancellation of policy in calculating the rebate payable (for example, one distributor ([ ]) retains up to a further two months’ premiums beyond the cancellation date when calculating the rebate due).

http://www.competition-commission.org.uk/inquiries/ref2007/ppi/pdf/prov_find_app_5_2.pdf

vintagegarters

di3004 wrote: »

Hi there and welcome.

Another one yet regarding Barclays/FP then?:eek: , I am seeing these names in my sleep.....:rolleyes: , right hun, if not done already as I have not gone through all the posts properly yet, I am sure your calculations will be looked at for you.;)

I do not do maths..sorry, I'm not the one for calculations lol, but Marshallka here is amazing at this.

Just a few questions:
When did you take out this loan?
Is it settled or still active?

Cheers

Thank you - it is still active and it was taken out in March '06.

vintagegarters

Hi there - the loan is ongoing so no rebate has been offered yet. We are making a claim for PPI misselling on several grounds, and have just received the first "thanks but you have no case" response. Thank you, Julia.

marshallka

Vintagegarters


the ppi element is 19.67 of the loan so overall this would be £11939.96.

How many repayments have you made so far??

marshallka

vintagegarters wrote: »

Hi - please could someone help me (newbie) to calculate how much we should be aiming to recover from a mis-sold PPI ? Thank you :

Cash loan amount : £35,000 (monthly repayment £337.23)
PPI "loan" amount : £8,571.50 incl IPT at 5% (monthly repayment £82.59)
Term : 180 months
Start date : March '06
APR : 8.4%
Interest rate : 8.136%

Really appreciate any help you can offer - having fun with Barclays / First Plus......

Thanks.

You would be aiming to recover whatever the total PPI would have been ie

19.67% of the total loan of £60701.40 being £11939.96

So 11939.96 less however many repayments you have made against this less the rebate if you have cancelled the PPI???

You then add the amount here to the repayments made and that is the actual cost of the PPI (you would not get the whole 11939.96 repaid to you as you have not yet paid it off - this is the amount if would have cost you had you let it go to term)

The loan is then redone without the PPI at all...as you have not yet settled.

busbyh

Hi
Can anybody help me. My building society are prepared to lend me the amount needed to pay of Picture. If this is paid off and my Picture account closed, will this jeopordise my claim for PPI.
Reveived a letter today from FSCS stating they are still investigating claim.

PICTURE STILL NOT DECALRED IN DEFAULT:mad: :mad: :mad: :mad: !!!!!!!!!!!!!!!!!!!
Thanks busbyh