Firstplus PPI Question

owe2much

Hi all had another letter of first plus this time stating that there are still adamant that my policy was sold correctly but as a good will gesture they are happy to....
Quote: This will mean a full refund of the insurance premium of XXXX.XX plus interest paid on the premium to date will be applied to reduce the balance of your loan and the part of the monthly payments made towards the payment protection insurance premium will be returned to you. The monthly payments due will then be rescheduled accordingly....

I take it this just means there willing to give me my premium back which they were due to do anyway in may next year but sign of any interest on my money they've been holding!?!?

Whats my next step????

marshallka

owe2much wrote: »

Hi all had another letter of first plus this time stating that there are still adamant that my policy was sold correctly but as a good will gesture they are happy to....
Quote: This will mean a full refund of the insurance premium of XXXX.XX plus interest paid on the premium to date will be applied to reduce the balance of your loan and the part of the monthly payments made towards the payment protection insurance premium will be returned to you. The monthly payments due will then be rescheduled accordingly....

I take it this just means there willing to give me my premium back which they were due to do anyway in may next year but sign of any interest on my money they've been holding!?!?

Whats my next step????

Sounds to me like they are putting you back into the position as if you haver had the PPI. If they are paying back to you all the PPI element of the repayments made (which would include interest paid on the PPI) then taking off the loan balance the PPI and interest due then that seems like a fair redress, there is however the matter of the 8% statutory interest for being deprived of the monies in the first place?? Have they mentioned this? I would actually want to clarify this though with them?

owe2much

Hi marshallka,

Phoned them to get some more details and I asked what about the interest due on the money I have pay'd for the ppi i.e. as if I had just put them money in a bank I would have incurred some interest on that money and I was told there wouldn't be anything extra paid to me just the initial premium!!

Owe2much

marshallka

owe2much wrote: »

Hi marshallka,

Phoned them to get some more details and I asked what about the interest due on the money I have pay'd for the ppi i.e. as if I had just put them money in a bank I would have incurred some interest on that money and I was told there wouldn't be anything extra paid to me just the initial premium!!

Owe2much

If that is the case then this is not a full redress. If all they are refunding is the premium and no interest then you have the option of taking it (personally I would not as the interest mounts to loads) or trying for more and then taking it to FOS.

Can you post the exact wording of the redress please?

owe2much

Hi marshallka, (this is between me & you!)

In our previous correspondence we promised to provide you with a full response to your complaint as quickly as we could. I am now able to do so.

I have reviewed the details of your complaint and remain satisfied that the details of the payment protection insurance policy were explained correctly and the information regarding the cover was sent to you for your consideration prior to proceeding with the arrangement.

I am therefore satisfied that you were provided with enough information to make an informed decision as to the suitability of the policy.

We are concerned that you are unhappy with the remaining cover provided by the insurance policy and should you wish to cancel the policy we propose to make the necessary adjustments to the loan account to put it in the position as if the payment protection insurance had not been taken.

This will mean a full refund of the insurance premium of 6XXX.XX plus interest paid on the premium to date will be applied to reduce the balance of your loan and the part of the monthly payments made towards the payment protection insurance premium will be returned to you. The monthly payments due will then be rescheduled accordingly.

I would like to point out that this refund is purely a gesture of good will, made without prejudice, with no admission of liability by either the insurers or (spit) and is confidential between the two parties.....

marshallka

owe2much wrote: »

Hi marshallka, (this is between me & you!)

In our previous correspondence we promised to provide you with a full response to your complaint as quickly as we could. I am now able to do so.

I have reviewed the details of your complaint and remain satisfied that the details of the payment protection insurance policy were explained correctly and the information regarding the cover was sent to you for your consideration prior to proceeding with the arrangement.

I am therefore satisfied that you were provided with enough information to make an informed decision as to the suitability of the policy.

We are concerned that you are unhappy with the remaining cover provided by the insurance policy and should you wish to cancel the policy we propose to make the necessary adjustments to the loan account to put it in the position as if the payment protection insurance had not been taken.

This will mean a full refund of the insurance premium of 6XXX.XX plus interest paid on the premium to date will be applied to reduce the balance of your loan and the part of the monthly payments made towards the payment protection insurance premium will be returned to you. The monthly payments due will then be rescheduled accordingly.

I would like to point out that this refund is purely a gesture of good will, made without prejudice, with no admission of liability by either the insurers or (spit) and is confidential between the two parties.....

Right, from reading it again they look to be redressing correctly and they have mentioned the interest. If they redressed through FOS for instance you would get back in the form of a cheque all the repayments you have made to date (with interest) towards the PPI and 8% statutory interest on top. Your remaining PPI and interest would then be taken off the balance owing at that date on the loan and a new loan would reflect this and the repayments reduced accordingly. I would ask that they explain the contents of the letter as they "are" stating to put you back into the position as if you never had the PPI but you feel that they are not. I must admit I think they are from reading it again.

Maybe someone else will put some input into this.;)

sunnygirls

:beer:

owe2much wrote: »

Hi all had another letter of first plus this time stating that there are still adamant that my policy was sold correctly but as a good will gesture they are happy to....
Quote: This will mean a full refund of the insurance premium of XXXX.XX plus interest paid on the premium to date will be applied to reduce the balance of your loan and the part of the monthly payments made towards the payment protection insurance premium will be returned to you. The monthly payments due will then be rescheduled accordingly....

I take it this just means there willing to give me my premium back which they were due to do anyway in may next year but sign of any interest on my money they've been holding!?!?

Whats my next step????

Hi there Well Done ,i think this means they will knock the original premium off your loan (which you would of got back next year ) but with any interest youv'e paid also which you normlly dont get back after 5 years
and you will get all payments made back ,so if you have paid £60 a month for 4 years you will get back £2880 by cheque but i dont think they are paying interest on this thats how i read it anyway i may be wrong

Sunny

owe2much

Right so if...my PPI was 5000 over the 5 year period then 5000 is basically what they are offering back to me!(plus interest on the 5000 over 5 years??) aswell as taking off the interest which was added over the 25year period of the loan??

why don't they just put in the letter XXXX is what you'll be getting back! is that ok??? :rolleyes:

halifax71

We've done some calcs on the FirstPlusComplaints site. A simple (ish) example is as follows.

E.g. if you took out a £50k cash loan over 25 years but £10k was added for PPI then your repayments for the whole of the agreement would be x% APR x £60K.

A simple percentage can be applied to your payments so in this case 16.67% (10/60) of your monthly payments would have been for the PPI.

You PPI refund will be for the 16.67% of your monthly payments to date. As they're not accepting liability you won't get the 8% interest. If you want it, reject the offer and go to the FOS.

So, to work out your revised balance, crunch some numbers. In Excel split calc columns as follows

Column 1 = Loan (Balancing Figure to 100%), e.g. 100% - 16.67% = 83.33%

Column 2 = PPI ((Total Loan less Cash Loan) divided by Total Loan), e.g. (60-50)/60 = 16.67%

Column 3 = Total (Loan including PPI) = 100%

Now if you apply your APR, e.g. 10%, to those payments using the Excel formula =POWER(1+APR,1/12)-1, e.g. =POWER(1+0.1,1/12)-1 = 0.8% per month.

You can then see how much interest has been charged and how much capital repaid on each element. More importantly you can see how much you have actually paid for the PPI and how much you would have been paying had the PPI never been there.

A worked example based on a £32.5K loan and £6.5k PPI and an initial APR of 7.9%.

Following on from above you need to remember that of your monthly payments 83.38% was for the loan and 16.62% was for PPI. (E.g. 52.85 / 318.01 = 16.62%)

This is an approximation based on your loan, monthly interest,

Month Balance Interest Paid Balance
Sept 04 £32,500 £206.58 £265.16 £32,441.42
Nov 09 £28,343.23 £215.17 £293.60 £28,264.80

This repays your loan in 2024 – does that sound about right?

Ignore the PPI – the 16.62% of your monthly payments are all PPI related (Int & Capital).

owe2much

LOL....thanks for the simplish example, could you transpose that for a loan of 25k and ppi of 6122.50! :O)

Owe2much