PPI Reclaiming Discussion part 4

jacseb

hi i put a claim in to natwest for a ppi policy that was missold because i was told that it would help my credit application i had a response today which said whilst it did not uphold my complaint it would offer me £750 as goodwill etc but i signed the forms knew what i was getting into so it was my own fault even though i did really belive the ppi would help getting the loan.the letter advises i go to FOS but doesnt say anywhere itsthe final decision,also it says loan was purchased in a single payment with the premium added to the loan does that make any difference.if i take it further will i then lose money offered v.confused please advise.many thanks (new at this if this is in anyway wrong sorry).

marshallka

stereo_mike wrote: »

For mortgages the time limit is 12 years.

So biased to the lenders again. Some people have "secured" loans (similar to mortgages as your property is at risk) and they only have 6 years to take a complaint through the courts to claim back money owed from a lender but the lender can have 12 years. I think its unfair. Just my opinion.

marshallka

jacseb wrote: »

hi i put a claim in to natwest for a ppi policy that was missold because i was told that it would help my credit application i had a response today which said whilst it did not uphold my complaint it would offer me £750 as goodwill etc but i signed the forms knew what i was getting into so it was my own fault even though i did really belive the ppi would help getting the loan.the letter advises i go to FOS but doesnt say anywhere itsthe final decision,also it says loan was purchased in a single payment with the premium added to the loan does that make any difference.if i take it further will i then lose money offered v.confused please advise.many thanks (new at this if this is in anyway wrong sorry).

If you do not accept it you COULD get the whole of the premium back and interest and also 8% statutory interest too. Its entirely up to you whether to accept or not but I would look at it that they have offered you something and they do not do that for nothing!!

You can either accept as full and final or write another letter in the hope they will up their offer to make a full refund of all the PPI, interest and 8% statutory interest and ask them for a final response. You can then take this to the FOS.

jacseb

so do i now use the letter template 2 for this

stereo_mike

marshallka wrote: »

Yeah read that one today but how can they justify charging over £4K (that does include interest and was rule 78 rebated) for a policy no longer of use. I know this is the first case from what I can see of "just" unfair rebate and I have not seen anymore on here but I have used unfair contract terms in that I was not to know how this rule 78 worked (and still learning now). Also there was no cooling off period beyond the agreement of 7 days from signing and our policy had "life insurance" included. I don't know what dates this actually had any rule if they did. I will just have to be "patient" I suppose. I wonder if FOS can actually negotiate a fair rebate and also would the interest charged at settlement on the loan of the PPI be included. I have a passage from another case of FOS for misselling whereby FOS says they do look at the interest. I will bring this up if they do not and argue it.

Also can the insurer be made resposible for misselling. I know of others on here in the same boat. Didn't insurers have a duty to make sure that the people that sell their polices are fit to do so. It would open up a whole new avenue for claimers.

The insurer can not be held liabale, as they are only acting on the instructions of the broker or loan complany to incept the policy. I surpose its like you taking out a car insurance policy with an insurer, if you make a mistake on the app form you can't blame the insurer as it was your own fault.

I think the only time the insurer can be liable is if the agent selling the product is a tied agent, or the broker is acting as an appointed representative of the insurer.

marshallka

stereo_mike wrote: »

The insurer can not be held liabale, as they are only acting on the instructions of the broker or loan complany to incept the policy. I surpose its like you taking out a car insurance policy with an insurer, if you make a mistake on the app form you can't blame the insurer as it was your own fault.

I think the only time the insurer can be liable is if the agent selling the product is a tied agent, or the broker is acting as an appointed representative of the insurer.

Thanks for that. I saw people on here actually telling people to make the lender responsible for the misselling of the PPI and then people were saying make either the lender, insurer or broker????

I am only after a fair rebate when I settled and I have worked out that if I had paid £4000 extra cause of the PPI and it was cause of rule of 78. Its unfair to take this amount as a "Penalty" for settling early and I tried making this complaint against the "lender" originally. The lender protested I assume and then FOS told me it was against the insurer as the rebate was determined by the insurer and it was as a result of the "terms" of the PPI policy. (ie rule of 78). I am challenging this use on a single premium as i had no idea of its meaning and also it was only fair to the lender/insurer. The use of this breaches the unfair terms in consumer contracts regs as an unfair penalty and it was not written in a term that I could understand.

What do you think my chances are? I feel confident that FOS will uphold this as I have provided all the figures of this from the rule 78 calculator (or at least i did till I read about the FSA thing this morning) . If they do uphold and the insurer protests and it goes to the Ombudsman what do you think my chances would be then?

marshallka

jacseb wrote: »

so do i now use the letter template 2 for this

I personally would not use any template and would write your own reasons for misselling and that you do not accept (if in fact you do not) and then send by recorded delivery and wait for their final response. You can use the template as a guide though but that just my opinion.

stereo_mike

marshallka wrote: »

Thanks for that. I saw people on here actually telling people to make the lender responsible for the misselling of the PPI and then people were saying make either the lender, insurer or broker????

I am only after a fair rebate when I settled and I have worked out that if I had paid £4000 extra cause of the PPI and it was cause of rule of 78. Its unfair to take this amount as a "Penalty" for settling early and I tried making this complaint against the "lender" originally. The lender protested I assume and then FOS told me it was against the insurer as the rebate was determined by the insurer and it was as a result of the "terms" of the PPI policy. (ie rule of 78). I am challenging this use on a single premium as i had no idea of its meaning and also it was only fair to the lender/insurer. The use of this breaches the unfair terms in consumer contracts regs as an unfair penalty and it was not written in a term that I could understand.

What do you think my chances are? I feel confident that FOS will uphold this as I have provided all the figures of this from the rule 78 calculator (or at least i did till I read about the FSA thing this morning) . If they do uphold and the insurer protests and it goes to the Ombudsman what do you think my chances would be then?

On most certificates of insurance under the cancellation clause there should be an example of a "typical" refund. If this was not in your original paperwork, the insurer should have sent you a document with this on when the rules changed in late 2007.

A lot of insurers incur more costs at the start of a policy (greater risk, set up cost etc) therefore you will always get back less than a pro-rata refund.

It all depends if they have agreement on the calculation from the FSA.

marshallka

stereo_mike wrote: »

On most certificates of insurance under the cancellation clause there should be an example of a "typical" refund. If this was not in your original paperwork, the insurer should have sent you a document with this on when the rules changed in late 2007.

A lot of insurers incur more costs at the start of a policy (greater risk, set up cost etc) therefore you will always get back less than a pro-rata refund.

It all depends if they have agreement on the calculation from the FSA.

My loan was taken out in 2000 and settled in 2003 which was before these rules then. I understand they can state there was greater risk at the start of the policy but i have read that this was seen as unfair as the risk was virtually the same as most policies only pay out for 12 months anyway and only cover the first 5 years.

From the Competition commission here

We accepted this argument as being valid for policies where a condition can be covered for the life of the loan (for example, most providers offer insurance in the event of accident or sickness for the duration of the event, up to the life of the loan or five years, whichever is shorter). However, it could be contended that the argument is only partially valid in circumstances where insurance is paid for up to 12 months (for example, in the case of most unemployment claims); in this case the level of risk borne by the insurer is the same until the last year of the policy when the risk decreases because there is less than one year left to insure.


It says here about rule of 78 being used in PPI refunds


Many personal loans work on a simple interest basis and if you settle up early, this will usually reflect the fact that you've had the loan for a shorter time period -- although you may have to pay a penalty of one or two months' interest. However, with the payment protection premiums, the Rule of 78 is still a firm favourite in the industry and when you think about, it's not hard to see why.
It all comes into play when you want to pay off your loan early and the insurer has to calculate how much you've paid in insurance premiums up to that point. It's a complicated mathematical formula but, effectively, since you've paid much of it up front, there won't be a lot left to refund to you. It usually comes as a bit of shock to people who haven't read the small print in the contract.
This shouldn't deter you from disputing the matter either directly with the insurer or the loan company who sold you the policy in the first place. About four years ago, the then version of the Financial Ombudsman expressed concern to the Association of British Insurers about their use of the Rule of 78 and, unhappy with their response, stated:




"...in considering such complaints, we now endeavour to establish whether the borrower had the opportunity to understand at the outset that, if the insurance were to be cancelled before the end of the loan term, a pro rata refund would not be given and how the calculation would be made. If this was not explained clearly, then we may take the view that the insurer should give a pro rata refund."


If this is the case like the quote above then surely I have a little chance of winning on this. I had no idea of what this term actually meant which stated the rule of 78 would be used in the refund. I honestly think if anyone had this rule explained to them properly then anyone in their right mind would not agree to it. Apparently my PPI was non advised so all I had was the insurance documents (which I did not have!!) to see this term and work out for myself.

Thanks for the replies stereo mike.

Much appreciated.

marshallka

Wondered if this had anything to do with the FOS accepting other complaints in the future.

http://www.wider-implications.info/case_studies/wi_11.html

This was in April 2009. And then the FSA replied in a letter here

http://www.wider-implications.info/assets/pdf/Sants-Kelly-PPI.pdf



and then this is what happens when a wider implication issue is raised

FSA is considering the issues raised by the FOS and will reply formally with a decision on possible measures to take under the WI process, which include:

• Supervisory or enforcement action.
• Regulatory action under the Unfair Terms in Consumer Contacts Regulations 1999.
• Securing redress.
• Publishing rules or guidance (or both).

http://www.widerimplications.info/process/what_will_be_done.htm


Its always good to make a complaint to FOS and also the OFT and FSA regardless. It may help with future complaints.

A bit more info here
http://www.financial-ombudsman.org.uk/publications/technical_notes/ppi-update.pdf

The minutes of the FOS meeting are here


http://www.fos.org.uk/about/board-minutes-mar09.pdf


There is something about "collective redress". ?????

Lets hope that something comes about soon.