Was my Insurance a Single Premium??

tommy44

Hi

I took out a loan for 15,000 on which they added ppi,
This amount was for £2550.00.
Interest per month 0.759% APR 9.5% (this has increased 10.5%) for the loan and ppi monthly
monthly repayment 21.59. Over 300 months.

Was this a single premium? Please excuse my ignorance. Just trying to understand how these things work.

Now, as I have already written on here that the ppi only covered the first 5 years and as there is still 20 yrs to run on the loan, how much is it going to cost me if
they keep on taking the monthly payment for ppi, which we no longer benefit from.
Why did they think they had the right to do this?

It's like me buying a litre of milk, pouring enough for 5 cups of tea, and then the shopkeeper, saying, "thank you, I'll have that back and the full price for the milk as well". Argh, I am so mad, that we all have to go through this, and I could do without the stress and the worry that they are going to say "get lost", because you signed for it, tough luck.

Many thanks for listening

maxdp

tommy44 wrote: »

Hi

I took out a loan for 15,000 on which they added ppi,
This amount was for £2550.00.
Interest per month 0.759% APR 9.5% (this has increased 10.5%) for the loan and ppi monthly
monthly repayment 21.59. Over 300 months.

Was this a single premium? Please excuse my ignorance. Just trying to understand how these things work.

Now, as I have already written on here that the ppi only covered the first 5 years and as there is still 20 yrs to run on the loan, how much is it going to cost me if
they keep on taking the monthly payment for ppi, which we no longer benefit from.
Why did they think they had the right to do this?

It's like me buying a litre of milk, pouring enough for 5 cups of tea, and then the shopkeeper, saying, "thank you, I'll have that back and the full price for the milk as well". Argh, I am so mad, that we all have to go through this, and I could do without the stress and the worry that they are going to say "get lost", because you signed for it, tough luck.

Many thanks for listening

Hi

Yes that is single premium. They add the PPI on the top of the Loan plus interest. You are usually only covered for the first 3 or 5 years.. Also if you took the loan out in joint names then usually only the first named person is covered by the insurance.

Good luck if you decide to claim it back.

di3004

tommy44 wrote: »

Hi

I took out a loan for 15,000 on which they added ppi,
This amount was for £2550.00.
Interest per month 0.759% APR 9.5% (this has increased 10.5%) for the loan and ppi monthly
monthly repayment 21.59. Over 300 months.

Was this a single premium? Please excuse my ignorance. Just trying to understand how these things work.

Now, as I have already written on here that the ppi only covered the first 5 years and as there is still 20 yrs to run on the loan, how much is it going to cost me if
they keep on taking the monthly payment for ppi, which we no longer benefit from.
Why did they think they had the right to do this?

It's like me buying a litre of milk, pouring enough for 5 cups of tea, and then the shopkeeper, saying, "thank you, I'll have that back and the full price for the milk as well". Argh, I am so mad, that we all have to go through this, and I could do without the stress and the worry that they are going to say "get lost", because you signed for it, tough luck.

Many thanks for listening

Hi Tommy, how are you?:A;)

Yes your right Tommy they did sell you this type of product that you will be paying for the life of your loan, annoying isn't it?:mad:

Goodness knows what it amounts to, but I know its very extortionate.

You have done the right thing though by writing to complain and reclaim, and I wish you luck, keep on at them, I'm sure if this went as far as the FOS they will certainly consider this in your favour, as these type of policies are looked at very dimly.

More info here:

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."

As on Martins page on link here:
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance

tommy44

Hi Max and Di

Thanks Di, for that full explanation, will read it a couple of times so that it can sink in.

Max, I have written to ask for the full amount with interest to be paid back, just waiting for their response.

Just trying to get my head around things and to understand things a little better.

Will let you know what happens, and I am sure I will have lots of question to ask along the way.

Enjoy your day.

di3004

tommy44 wrote: »

Hi Max and Di

Thanks Di, for that full explanation, will read it a couple of times so that it can sink in.

Max, I have written to ask for the full amount with interest to be paid back, just waiting for their response.

Just trying to get my head around things and to understand things a little better.

Will let you know what happens, and I am sure I will have lots of question to ask along the way.

Enjoy your day.

Hi Tommy

With pleasure, your very welcome.:A;)

We wish you luck and of course keep on at them, we will help you through this all we can.

If you think you may have been sold PPI on other products also, even credit cards, store cards and so on, and mis sold, then start reclaiming on them also when your ready, good luck.;)


You too have a lovely day.;)

Di
X

maxdp

tommy44 wrote: »

Hi Max and Di

Thanks Di, for that full explanation, will read it a couple of times so that it can sink in.

Max, I have written to ask for the full amount with interest to be paid back, just waiting for their response.

Just trying to get my head around things and to understand things a little better.

Will let you know what happens, and I am sure I will have lots of question to ask along the way.

Enjoy your day.

Hi There. Good for you am glad you are going for this. Do let us know how you get on . Enjoy this wonderful weather too.:D

mangle101

With reference to this section - 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."

I visited my bank on Friday & the rate i was paying when i first took the loan is 8.9% if i wanted to remove the PPI i was told that the rate would go upto 18.9%, is this wrong? Can they do this?

tommy44

Hi

I rang up and said that I wanted the Insurance to be cancelled, so that my monthly payment would be reduced by this 20 odd pound part of the loan. I was told that I was no longer covered by the loan as it only ran for 60 months and I was 61 months into the loan. I then said, well does that mean my monthly payment for the loan will be reduced and I was told, "no", my payment would stay the same, and I said, well that's not right or fair, and was told that it was on the agreement. So I checked the agreement and it does say that it ceases upon 5 years, BUT, there are two columns on the agreement, one side the loan amount with interest for 300 months, and the other side, the Insurance part with interest, monthly amount, but it says that it is for 300 months.

So this is my argument. They expect me to continue paying 170 odd pound a month, of which 20 odd pound is for insurance, but I am no longer covered, and so I am paying for something of which I gain no benefit. This was not explained to me, when I took out the Insurance.

I don't know if it's worth ringing them again to ask for the monthly amount to be reduced by the Insurance payment. What do you kind, informative folk think? Or do you think I should, just wait to see how they reply to my letter, (1st template).

Thank you in advance.

melorablack

The repayments include loan, ppi and interest on both, because of this it is difficult to reduce the monthly repayments by the "insurance" amount because the insurance amount is the single ppi premium that was added to your loan at the beginning. It is not added monthly so they can't reduce the repayment. Does this make anymore sense lol? (I'm confusing myself here!)

tommy44

Hi

Does that mean they are right though? Will this hinder my case?

regards

melorablack

It's just the way single premium polices are so as far as them not being able to reduce the repayments - yes they are right (because there is no monthly insurance payment) but whether they are right with regard to the mis selling and the fact you have a single premium policy anyway is another matter.