Really confusing situation: any maths brains out there?

[Deleted User]

Thanks for all your help with this.

It's also not so much the calculations, as the process. What should Barclays have done when I went in to ask them to remove PPI?

I think they've done things in a cack-handed way and should have reduced my loan balance rather than refunding me all that money. Otherwise they've refunded me £1,196 on one hand but I've ended up paying £1,099 more than I should have (in interest, capital), so they're acting a bit like Robin Hood, so in practical terms my 'refund' was only £97!

[Deleted User]

Currently still ding-donging with two solicitors, both of whom now feel that I've got a case to make against Barclays for how they've processed my loans.

I think I've finally gotten to the bottom of the maths involved too. I've used this Simple Interest Calculator to work it out:

http://www.vertex42.com/Calculators/simple-interest-loan.html

When I visited the branch in 2006, there were several things they could have done:

Option A

They could have retrospectively cancelled out the (mis-sold) PPI and applied my 7 payments of £242 to what should have been a starting balance of £10k. This would have meant that the balance would have been £8,273 upon restructuring, so my balance today (after lots of further payments) would be £3,457 (currently it's £5,782, to I'm 'down' by £2,324).

Option B

What they did is refund me £1,502 in total at the time (having paid in £1,694) and 'reset' my balance to £10k. I couldn't apply that payment of £1,502 to the loan as overpayments are prevented, so instead my £10k loan is now £5,782 today.

Accordingly, I'm 'down' in absolute terms by (£2,324 + (£1,694 - £1,502)) - £1,502 which equals £1,014, but I will be down a lot more having paid more interest to get to that point.

So, by my reckoning, it's not a refund at all, as they've ended up making more money out of me through their actions.

It's interesting to compare this to the Bank Charges Reclaiming where lenders are going out of their way to apply refunds direct onto loans, and so not into the hands of customers!

di3004

Deleted_User wrote: »

Currently still ding-donging with two solicitors, both of whom now feel that I've got a case to make against Barclays for how they've processed my loans.

I think I've finally gotten to the bottom of the maths involved too. I've used this Simple Interest Calculator to work it out:

http://www.vertex42.com/Calculators/simple-interest-loan.html

When I visited the branch in 2006, there were several things they could have done:

Option A

They could have retrospectively cancelled out the (mis-sold) PPI and applied my 7 payments of £242 to what should have been a starting balance of £10k. This would have meant that the balance would have been £8,273 upon restructuring, so my balance today (after lots of further payments) would be £3,457 (currently it's £5,782, to I'm 'down' by £2,324).

Option B

What they did is refund me £1,502 in total at the time (having paid in £1,694) and 'reset' my balance to £10k. I couldn't apply that payment of £1,502 to the loan as overpayments are prevented, so instead my £10k loan is now £5,782 today.

Accordingly, I'm 'down' in absolute terms by (£2,324 + (£1,694 - £1,502)) - £1,502 which equals £1,014, but I will be down a lot more having paid more interest to get to that point.

So, by my reckoning, it's not a refund at all, as they've ended up making more money out of me through their actions.

It's interesting to compare this to the Bank Charges Reclaiming where lenders are going out of their way to apply refunds direct onto loans, and so not into the hands of customers!

Hi hun

I take it you not heard from Melorablack yet?

Send her a pm, I'm sure she would be glad to help, in case she have been here and missed this one.;)

di3004

Just realised and did not think to mention Tiggrae, I would maybe post this to Tiggrae on the above Reclaiming PPI discussion thread, and ask her to take a looksie at this for you, she deals with these all the time.;)

[Deleted User]

Thanks - I will ask those people!

I just went into my local branch (different branch this time) and spoke to the longest-serving member of staff there. She said that so few branches deal with personal loans that it's a real nightmare for staff, but she did think they had processed my loan incorrectly.

She said - without a second's thought and with brilliant mental arithmetic - that the bank shouldn't have given me a refund but should have applied my payments to the original balance of £10k, which would mean the figures are exactly as I said above.

She did say though that the fact I 'accepted' the refund might be a problem, although I had no choice and wasn't even aware it was being given as a refund in the first place.

Anyway, I'm now quite confident that something has gone wrong with how they processed my loan - and that I'm materially worse off as a result, so I've written to Barclays (again) stating my concerns more explicitly and asking them to sort the mess out before I pass the case over to my solicitor.

di3004

Deleted_User wrote: »

Thanks - I will ask those people!

I just went into my local branch (different branch this time) and spoke to the longest-serving member of staff there. She said that so few branches deal with personal loans that it's a real nightmare for staff, but she did think they had processed my loan incorrectly.

She said - without a second's thought and with brilliant mental arithmetic - that the bank shouldn't have given me a refund but should have applied my payments to the original balance of £10k, which would mean the figures are exactly as I said above.

She did say though that the fact I 'accepted' the refund might be a problem, although I had no choice and wasn't even aware it was being given as a refund in the first place.

Anyway, I'm now quite confident that something has gone wrong with how they processed my loan - and that I'm materially worse off as a result, so I've written to Barclays (again) stating my concerns more explicitly and asking them to sort the mess out before I pass the case over to my solicitor.

Hi hun

I agree its defo best to get this double checked just to make sure.

You done the right thing anyway by writing to them (remember to keep a copy as well).
Hope this is sorted out very soon for you.;)

melorablack

Deleted_User wrote: »

Having received a letter back from Barclays, I have discovered that when the new loan (without PPI) was taken out to replace the loan (with PPI) that the loan amount was identical - £10,000 - even though I had already made 7 payments of £242 per month towards the loan.

Or, in other words, I took out a loan for £10k. I was mis-sold PPI on top. I made 7 payments of £242 towards the loan, but when I went into the branch and asked for the PPI to be removed they did this, but the loan balance reverted back to £10k.

So, £1,694 worth of payments have disappeared into thin air.

I'm now pursuing this complaint via Barclays and - shortly - the FOS, as Barclays can't seem to understand my complaint and don't really get what the issue is.

What I'm wondering is if anyone here is mathematically savvy enough to help me work out what my loan balance SHOULD be - or, rather - how much this error by Barclays has cost me?

It is actually going to be more than £1,694, because I've paid additional interest on a phantom balance that shouldn't have existed - if that makes sense?

Could anyone please help?

April 2005: Loan taken out. Balance = £10k + £1,789 PPI added upfront

Payment holiday from April - September, when first payment of £242 comes out.

From then on, regular monthly payments of £242, until my new loan took effect in May 2006.

Up to this point I had made total payments of £1,694.

The new loan balance was for £10k.

From then, monthly repayments of £154.50 took effect (Barclays altered the length over which I'd be making repayments, too).

What should my loan balance be today if Barclays hadn't added PPI?

Ok first of all, at the beginning of the loan your monthly payment is shared unequally between paying off the interest, the PPI and the loan (normally in that order) so it is entirely possible that in those 7 months everything you paid went towards the interest and PPI.

Deleted_User wrote: »

By the way, the key issue here is that just because I've asked for PPI to be removed, I'm now in a worse situation than I was before.

Ok, now this is probably because you have only asked for the PPI to be cancelled and not claimed that it was mis sold to you. If they were to uphold a complaint relating to the mis sale of the PPI you would get some money back as well as having a new loan (Which should be the same APR and of a similar term to the old one).

Hope this helps a little bit

di3004

Thank you so much MEL, your a star.....:T:T as always, cheers and I'm sure BungleJemson will be happy that you posted on this as well hun, thank you.:beer:Xx

[Deleted User]

melorablack wrote: »

Ok, now this is probably because you have only asked for the PPI to be cancelled and not claimed that it was mis sold to you. If they were to uphold a complaint relating to the mis sale of the PPI you would get some money back as well as having a new loan (Which should be the same APR and of a similar term to the old one).

Hope this helps a little bit

But would the new loan have the same balance as the old one, or a reduced balance to take into account the payments made so far? That's really the key question here.

I think you're right about the distinction between cancelling and mis-selling, although in my letter in July I did claim mis-selling and this part of the letter was totally ignored by Barclays.

melorablack

Deleted_User wrote: »

But would the new loan have the same balance as the old one, or a reduced balance to take into account the payments made so far? That's really the key question here.

I think you're right about the distinction between cancelling and mis-selling, although in my letter in July I did claim mis-selling and this part of the letter was totally ignored by Barclays.

It depends on how your payments were distrubuted between the loan, insurance and interest really. Normally you would expect to see a reduction in the balance but without seeing the transactions for the loan it's difficult to tell if it is right. I would go ahead with the mis sale and see what happens