PPI Reclaiming Discussion part 4

IRGWS

Hi,

The start date of my Mum's loan was 3/07/06 and the loan was settled on 21/02/07 for a settlement figure of £11,788.34

marshallka

IRGWS wrote: »

Morning everyone,

My mum is trying to reclaim PPI on a previous loan she had. The loan was for £10,000 and the associated PPI was £2104.63. Welcome also added additional charges including Medicare 24 £50.00, Homecare 24 £125.00 and Medicare 24 Second Customer £50.00 (the loan was a joint one with my late father). My parents settled the loan early.

My mum received a letter from Welcome yesterday saying that they acknowledge the PPI was mis sold and have offered her £1238.06 plus an additional £100.00 compensation. The allege that of that total PPI, £2104.63, £1258.12 was refunded when the loan was settled early.
The paperwork includes a break down of the figures- I'll type it out below:

B. Amount of PPI added to loan £2104.63
C. Less Rebate of PPI (You may £1258.12
already had some money
back if you repaid the loan
early)
D. Amount of interest added. £315.47
due to PPI premium.
E. Amount of compensation due. £1161.98
before calculating 8%interest.

F. Amount of payments received. £250.50
towards the PPI premium and
interest since loan start date.
G. 8% simple interest on the £76.08
payments made towards PPI.
H. Total compensation due. £1238.06
(E+G).

I'm just confused with regard to point C, ie the rebate of PPI due to the loan being settled early. Does anyone have any thoughts or suggestions?

Thanks for your help.

When you take out a single premium PPI it is actually a loan to pay over to the insurer for a premium that lasts a certain amount of time.

As you settled the loan early then you would have been entitled to a rebate (of the unused PPI). This would be usually (most companies have to do this) about 78% and they keep 22% back (sometimes less, sometimes more) of the unused PPI for admin etc but does not include the interest you were charged on it. It would only be a rebate of the actual cost of the policy.

Example

If your PPI preium was 6000 (without interest) over 5 years (usually they only cover 5 years of an "any" length loan BUT interest is charged for the full length of the loan).
Say you settled the loan early after repaying for 12 months. This would mean that you have paid for a policy (by way of the loan) but only used it for 1 year therefore 4 years unused. That would be worked out like this IF they work on 78% pro rata rebates

6000 divided by 60 months = 100 per month. You used 12 months (£1200) worth of it and then settled the loan. This would mean that 48 months were unused.

48 x 100 = 4800 x 78% = 3744... this would be the rebate that was applied to the loan. You do have to remember though that this rebate does not include interest charged on the PPI Premium loan.

amersall

marshallka wrote: »

When you take out a single premium PPI it is actually a loan to pay over to the insurer for a premium that lasts a certain amount of time.

As you settled the loan early then you would have been entitled to a rebate (of the unused PPI). This would be usually (most companies have to do this) about 78% and they keep 22% back (sometimes less, sometimes more) of the unused PPI for admin etc but does not include the interest you were charged on it. It would only be a rebate of the actual cost of the policy.

Example

If your PPI preium was 6000 (without interest) over 5 years (usually they only cover 5 years of an "any" length loan BUT interest is charged for the full length of the loan).
Say you settled the loan early after repaying for 12 months. This would mean that you have paid for a policy (by way of the loan) but only used it for 1 year therefore 4 years unused. That would be worked out like this IF they work on 78% pro rata rebates

6000 divided by 60 months = 100 per month. You used 12 months (£1200) worth of it and then settled the loan. This would mean that 48 months were unused.

48 x 100 = 4800 x 78% = 3744... this would be the rebate that was applied to the loan. You do have to remember though that this rebate does not include interest charged on the PPI Premium loan.

Hi marshalka, thanks for this.x

mumtothreegirls

Just a quick update. After sending a letter (and email) to MBNA stating that I wanted my PPI paid backI received a lett er asking for me to complete the FOS questionnaire and then they'll be able to investigate my claim fully so fingers crossed x

di3004

mumtothreegirls wrote: »

Just a quick update. After sending a letter (and email) to MBNA stating that I wanted my PPI paid backI received a lett er asking for me to complete the FOS questionnaire and then they'll be able to investigate my claim fully so fingers crossed x

Fingers crossed.;)
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance#reclaim

X

MattyA

mumtothreegirls wrote: »

Just a quick update. After sending a letter (and email) to MBNA stating that I wanted my PPI paid backI received a lett er asking for me to complete the FOS questionnaire and then they'll be able to investigate my claim fully so fingers crossed x

I just got one of them too

KIMY

Congratulations IRGWS how long did it take Welcome to respond as l have a PPI claim with them and over 7 weeks and still no final answer.

bugsy161

di3004 wrote: »

Fingers crossed.;)
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance#reclaim

X

Hi Di,

As you know I am unhappy with my compensation from Lloyds TSB and I have now had a reply from the letter I sent to my M.P. and he is gladly going to take my concerns up with Lloyds TSB. I also sent a recorded letter to Eric Daniels on the 28th September, but I am yet to hear back.

The average PPI I paid per month between Jan 2000 and August 2007 was £55.00 per month so I have asked Lloyds to use this figure from Jan 2000 back to October 1987 and not the £12.00 figure they used from the Jan 2000 statement.

The amazing thing is that if I had paid £100 per month PPI from Oct 1987 to December 1999 and then cleared my credit card, then because the balance woud be nil in Jan 2000 they would pay me nothing in redress for the previous 13 years!!

I have stated to both my M.P. and Lloyds that where else in the world would you use one figure and not an average figure. I used the example of a golfer trying to get a handicap whereby if he shot a round of 10 over par in his last game but was 18 over par on his previous 6 rounds they would give him a handicap of 16.85 based on the average, and not a handicap of 10, based on his last round, which is the approach that Lloyds have taken.

The fact that the FOS have told me that it is an agreement between Lloyds and them is unacceptable and I have told them that it is untried, untested, unjust and unfair. Most cases do not go beyond the 6 years of subject access so how many cases have this 'system' been applied to?

If this has to be taken to court to confirm my belief that it is an unlawful act then I am quite prepared to do so, but my M.P. has told me to sit tight and wait to see where his discussions go first.

As a foot note for anyone else...................
Lloyds did not include the late payment or over limit charges in my redress so I sent for those in a seperate claim, using the figures from my SAR. They sent me a letter back Friday stating that the charges were clearly explained in their literature and they were justifiable. However, on this occasion, they were happy to refund me £820 (charges plus interest), which went back in to my bank on Saturday.

di3004

Hu Bugsy

Hope your well.

It seems like you have a very good and eager MP there to help you though this.

Its been a long old haul for you this haven't it?

Well I am keeping everything crossed for you on this Bugsy, and hope its resolved very soon.

Lloyds have a law of their own it seems doesn't it?

Well stay strong (as you've already been doing so for a very long time already), and hoping to hear a good outcome out of this soon.;) XXX

IRGWS

Hi KIMY,

Rather oddly my mum received a letter from Welcome out of the blue saying that they owed her some money. I would say from start to finish the acceptance letter took approximately 2 months, it involved a lot of phone calls from me and chasing them. They now say she will have the money in 10 days time/ fingers crossed!!