PPI Reclaiming Discussion part 4

Beatlefan

Hi, spurred on by your helpful advice yesterday, I've sat down and drafted a first letter to the supermarket who sold me my loan. I've used Martin's template and added some personal bits that apply to my case.

While I was looking through the paperwork for the loan, I wondered whether it was a single premum loan. I took it out in late summer 2004. In the credit agreement it says:

Details of Loan

(a)Main loan - £xxxx

(b) n/a - £0

(c) Insurance Loan - £xxxx (the premium payable to the insurers for the total PPI cover for the first customer explained in our PPI leaflet).

Credit - £xxxx (a +c)

Total charge for credit: £xxxx (comprising interest)

Total amount payable: a + c plus interest.


The monthly payments are broken down as main loan repayment and insurance loan repayment. It's the same amounts each month.

I've checked but there's no mention whether the PPI covers the whole term of the loan or just the first 5 years, as others have found.

Can anyone advise whether this looks like a single premium loan and whether I've been paying interest on the PPI?

Many thanks. :A

di3004

Beatlefan wrote: »

Hi, spurred on by your helpful advice yesterday, I've sat down and drafted a first letter to the supermarket who sold me my loan. I've used Martin's template and added some personal bits that apply to my case.

While I was looking through the paperwork for the loan, I wondered whether it was a single premum loan. I took it out in late summer 2004. In the credit agreement it says:

Details of Loan

(a)Main loan - £xxxx

(b) n/a - £0

(c) Insurance Loan - £xxxx (the premium payable to the insurers for the total PPI cover for the first customer explained in our PPI leaflet).

Credit - £xxxx (a +c)

Total charge for credit: £xxxx (comprising interest)

Total amount payable: a + c plus interest.


The monthly payments are broken down as main loan repayment and insurance loan repayment. It's the same amounts each month.

I've checked but there's no mention whether the PPI covers the whole term of the loan or just the first 5 years, as others have found.

Can anyone advise whether this looks like a single premium loan and whether I've been paying interest on the PPI?

Many thanks. :A

In my opinion yes its a single premium loan, they added this together, yet the ppi only covers for the first 5 years of the loan, yet you will be paying for this for the life of the loan, and interest as well.;)

Beatlefan

Thanks Di, that's helpful. :A Are all single-premium loans 5 years then? My loan term is 7 years, but it doesn't make it clear in the paperwork whether the PPI cover is for just the first 5 years or the full 7. As you say though, I'll be paying the interest for the full term whatever!!!

Makes me so angry they can sneak something in like that!!! :mad: I'm much more canny now in checking things like that - thanks in a large part to this site and forum! - but was still quite green when I signed this agreement.

Thanks again.

di3004

Beatlefan wrote: »

Thanks Di, that's helpful. :A Are all single-premium loans 5 years then? My loan term is 7 years, but it doesn't make it clear in the paperwork whether the PPI cover is for just the first 5 years or the full 7. As you say though, I'll be paying the interest for the full term whatever!!!

Makes me so angry they can sneak something in like that!!! :mad: I'm much more canny now in checking things like that - thanks in a large part to this site and forum! - but was still quite green when I signed this agreement.

Thanks again.

Hi there
Not a problem.
Yes I know what you mean and you have a good case here.

Here below, is what I just copied and pasted on Martin's front page about Single premium polices:

Were you sold a ‘single premium’ loan policy?

A single premium policy is where the whole cost of the insurance is added as a big lump sum at the start of the agreement, which is then repaid over the term of the loan. Many loan policies were sold like this and while sales are soon to stop, if this applys to you and you left or changed your agreement part way through, you may be eligible for a part refund.
Does this apply to you? Expand the full [URL="javascript:showDiv5()"]Single premium[/URL] briefing.





[URL="javascript:hideDiv5()"]Close the list[/URL]

In Jan 09 the Competition Commmission ended its two year investigation, saying this form of insurance is now banned and gave lenders until Oct 2010 to comply. The FSA, who'd previously said it thought the policies were likely to be unfair to consumers as they were restrictive and most didn’t allow refunds if a contract ended early, has now asked all lenders to stop selling it by 29 May 09.

These opinions greatly strengthen the weight of reclaimers' cases.

How to tell if you have a single premium policy?

This type of policy is mainly sold with loans rather than credit or store cards. If it’s a single premium policy, the original paperwork will show the insurance as a fixed lump sum amount.

If the agreement was after May 05, you would have been asked to sign a separate agreement so you should have extra paperwork for the loan and the insurance.

It’s also noteworthy that these policies are often only valid for five years max; even if your loan term is longer, so you could get a five year policy but end up paying interest on the insurance for the full loan term! If you didn’t realise your cover only lasts / lasted for five years read the 'Big One' section above for more info.

When is a reclaim possible?

The FSA has said that new and existing customers should benefit from its agreement with providers and my interpretation is this means it should also apply to past consumers who were treated unfairly. If you had a single premium policy, one of the following applies to you and you didn’t get a refund at the time, you should now contact your lender to ask for a partial refund.

• cancelled your insurance before the end of the policy,
• paid your loan back early (unless this was very near the end),
• had a change of circumstances meaning you were no longer eligible for the cover and informed your insurance provider of this change at the time.

If your circumstances did not change and you saw your policy through to the end you will not be able to reclaim for this section, but do read the other misselling categories to see if you can reclaim the insurance for another reason.

The FSA also says that refunds should be “calculated fairly, which may or may not result in a pro rata refund”. Unfortunately refunds tend not to be fully pro rata, i.e. you won’t get back half the cost of the insurance if you have cancelled after half the time, as providers are allowed to include justifiable costs. These costs are usually paid towards the start of your contract but if you do cancel you should still get a good whack back.

Further note for existing customers

If you still have a single premium policy you can’t make a reclaim under this section, yet you may be able to cancel your insurance and get it cheaper elsewhere. See the Ditch Loan Insurance article for more info and read the other misselling categories to see if you can reclaim the insurance for another reason.

If you have changed your circumstances since taking out the policy contact your provider as soon as possible to see if you're still covered.

When you try to cancel your insurance without ending the loan, some lenders make you start a new agreement. They are allowed to do this as long as the new loan is on the same or better terms and does not disadvantage you in any way, for example it shouldn’t be more expensive or last longer. You should ask for this to be done without making a new search on your credit file.

The FSA says: "When consumers cancel the PPI without repaying the loan, some firms will need to reissue the loan without the PPI. Firms should ensure they treat their customers fairly in relation to the terms on which they reissue the loan."

Beatlefan

Thanks Di. I don't think I can claim based on the single premium alone, as I've not cancelled the policy mid-way. However, I've used it in my letter as a further example of how they weren't completely up front with me during the sales process.

If you've time, I'd be really grateful if you'd let me know what you think of my draft letter before I send it. I've cut and pasted it below.

Many thanks. :A

I purchased the above policy from you in xxxxx, but now believe that I was mis-sold this policy for the following reasons:

This is due to the fact that I was not given the correct information when the policy was sold to me, and I do not believe your member of staff sold the policy to me in my best interests.

I am already covered through work and have a private life insurance and income protection policy. My employer provides a generous illness and redundancy package. I was not asked by your member of staff whether I had any alternative cover, but made to feel that it was necessary to cover my loan repayments if I was ill or made redundant.

In effect, you sold me an all or nothing policy, which does not take into account any existing cover. Nor was I given the option to exclude elements of my existing cover from the PPI.

Additionally, your salesperson did not give me full information on what the policy would and would not cover. For instance, they did not explain to me that this was a single premium loan which charges interest on the PPI to the total of the loan. I was not offered a cheaper alternative. I also believe that single premium loans only provide cover for five years; whereas my loan agreement is for seven years.

Furthermore, I informed your member of staff that I had a previous medical condition, but they did not inform me of the effect this could have on the insurance when the policy was sold. I note from now having read the terms of the policy that previous medical conditions are excluded.


Unless you can satisfactorily justify to me that the policy was fair and reasonable I am requesting a full refund of all premiums, and subsequent interest on these payments, that I have paid to date. As I believe I have been deprived of this money I also expect 8% statutory interest, the amount a court would award, to be added to each payment made.

I look forward to a full and prompt response to this letter and for the matter to be concluded within eight weeks or I shall be contacting the Financial Ombudsman to investigate my complaint.

Yours faithfully,

di3004

Beatlefan wrote: »

Thanks Di. I don't think I can claim based on the single premium alone, as I've not cancelled the policy mid-way. However, I've used it in my letter as a further example of how they weren't completely up front with me during the sales process.

If you've time, I'd be really grateful if you'd let me know what you think of my draft letter before I send it. I've cut and pasted it below.

Many thanks. :A

Great letter, it looks like you have covered all areas, and stand a good chance, as you do have good reasons for this case.

But If they respond with a fob off response, write back to them again, there is a stage 2 letter you can use.

Again, brilliant letter, well done and good luck.:T:A;)X

Beatlefan

Brilliant, thanks Di, I'll get it off in the post! :j

I've also been digging out some old loan agreements with my bank dating back to roughly 1998-2004 when I needed to consolidate a few times, when the kids were really small and money was very tight.

It looks like the case for claiming using the single premium reason definitely applies here, as I paid off the loans early. I did get a PPI rebate each time, but from reading through the forum threads, I don't think these rebates ever covered the full amount?

I know some of these loan agreements (with the bank) are more thank six years old, but it's worth the cost of a stamp to the bank to see. Definitely a case of mis-selling, if the time issue doesn't count against me.

Thanks again.

di3004

Beatlefan wrote: »

Brilliant, thanks Di, I'll get it off in the post! :j

I've also been digging out some old loan agreements with my bank dating back to roughly 1998-2004 when I needed to consolidate a few times, when the kids were really small and money was very tight.

It looks like the case for claiming using the single premium reason definitely applies here, as I paid off the loans early. I did get a PPI rebate each time, but from reading through the forum threads, I don't think these rebates ever covered the full amount?

I know some of these loan agreements (with the bank) are more thank six years old, but it's worth the cost of a stamp to the bank to see. Definitely a case of mis-selling, if the time issue doesn't count against me.

Thanks again.

With pleasure , you go for them all hun and your right for a cost of a few stamps, it may be all worthwhile in the end.

I would post by using recorded delivery, you can check on the royal mail website "tracking" to make sure your letters reach them, this is your proof as well.;)
http://www.royalmail.com/portal/rm/personal?pageId=tab_track_rm&catId=500185&mediaId=83900761

Sometimes this does not always show up, if after a few days this is the case, you can contact the royal mail tracking direct, this should also confirm the item has reached the destination.;)

Post offices open as normal tomorrow (Saturday), shut again Monday, i expect you already know that though lol.:D

Good luck to you anyway, with them all. X

beaniebabe

1. Thanks Di for the information kindly posted by other users in respect of picture. I'm not used to using the computer, so all this is very new to me. Please let me know if I am doing something wrong! Cheers.

di3004

beaniebabe wrote: »

1. Thanks Di for the information kindly posted by other users in respect of picture. I'm not used to using the computer, so all this is very new to me. Please let me know if I am doing something wrong! Cheers.

Hi there, not a problem, you will get used to it in time.;)

Your not doing anything wrongX

Check here on post 3089 (I think) lol
http://forums.moneysavingexpert.com/showthread.html?t=1460775&page=155

Good luck.:Ax