Offered a "backdated cancellation" of Protection Insurance

pistolpete180

I'm afraid I'm not 100% clear as to how this whole claim process works so apologies if this has been covered previously. I'm helping a relative of mine who has taken a horrendous loan with Lloyds including Protection Insurance. She isn't particularly confident with writing letters etc so I've offered to help.

Situation as follows:

Loan amount: £2000 (APR 21.7)
Protection Insurance: £615 (APR 21.7)
Date Taken: April 2008
Term: 48 Monthly payments

I have used the 1st letter template which was sent a number of weeks ago. She has since received a letter dismissing the claim but they have offered to "cancel the Protection Insurance from the date of the claim (3rd June)" and take the following amount off the loan: £437.37

They say the monthly payments will remain the same and she will simply pay the loan off earlier.

Is this offer something she should consider accepting or is it simply something should could've achieved by simply cancelling the policy herself?

My point, I suppose, is what is the best anyone can expect from a claim? If they give the entire amount back plus interest I assume it's simply taken off the total remaining loan amount?

Thanks

marshallka

pistolpete180 wrote: »

I'm afraid I'm not 100% clear as to how this whole claim process works so apologies if this has been covered previously. I'm helping a relative of mine who has taken a horrendous loan with Lloyds including Protection Insurance. She isn't particularly confident with writing letters etc so I've offered to help.

Situation as follows:

Loan amount: £2000 (APR 21.7)
Protection Insurance: £615 (APR 21.7)
Date Taken: April 2008
Term: 48 Monthly payments

I have used the 1st letter template which was sent a number of weeks ago. She has since received a letter dismissing the claim but they have offered to "cancel the Protection Insurance from the date of the claim (3rd June)" and take the following amount off the loan: £437.37

They say the monthly payments will remain the same and she will simply pay the loan off earlier.

Is this offer something she should consider accepting or is it simply something should could've achieved by simply cancelling the policy herself?

My point, I suppose, is what is the best anyone can expect from a claim? If they give the entire amount back plus interest I assume it's simply taken off the total remaining loan amount?

Thanks

If you sent a complaint for the misselling of the premium then you should expect to be put back into the position as if you never had the PPi so it would be all payments and interest made against the PPI to date and the rest taken off the loan and the loan redone with it.

I personally would not accept and would write back and state the full amount and nothing less.

pistolpete180

Just to confirm. Am I correct in saying that by offering to cancel the Protection Insurance they (Lloyds) haven't in fact offered a settlement so I should reply to this effect and take the "I will be contacting the ombudsman in 2 weeks if I do not hear from you" stance?

Thanks for the advice

marshallka

pistolpete180 wrote: »

Just to confirm. Am I correct in saying that by offering to cancel the Protection Insurance they (Lloyds) haven't in fact offered a settlement so I should reply to this effect and take the "I will be contacting the ombudsman in 2 weeks if I do not hear from you" stance?

Thanks for the advice

Hard to tell from the above but most likely they are just cancelling as that is their wording. I would ask them if by doing this, this is putting you back into the position as if you never had the PPI at all (and 8% statutory interest on each repayment you have made already like the FOS do). If they say it is then that is ok but if not then ask that they do this and take it from there.

pistolpete180

Thanks. Having re-read it, they are only offering to cancel it and provide a rebate based on a sliding scale. Their one concession is to offer the cancellation from the date of the complaint and therefore give a slightly better rebate. In effect they aren't offering anything in addition to what would happen if the protection insurance was cancelled as per the original agreement. I'll send the letter saying this is not satisfactory and that I'll be taking the complaint to the Financial Ombudsman in 14 days time if I don't receive a satisfactory reply. Thanks again.