Refund of PPI on year old secured loan

xtinecop

We took out a secured loan on our property about a year ago. This was a big mistake as my husband couldn't really afford the monthly payments and
we are now selling up and splitting up!!

I was shocked to receive the settlment statement. In this they have front loaded the PPI premium of 24K (the loan was for a considerable amount) onto the settlement figure and have allocated us a refund of approx 3K! This is grossly unfair as we are paying for something we won't actually use. IMO it should be refunded on a pro rata basis with an admin fee.

We have written to complain but of course they have written back saying t's and c's etc which is true it is buried in the small print. My husband handled the loan application etc and he does not recall any mention of this being made.

What do people think - is there any way that we can get this money back or should we bite the bullet and put it down to experience. Is it worth consulting a solicitor about this?

I feel completely ripped off by this. I know the FSA has recently reported on nil refund PPIs but as with all the regulatory bodies they don't back it up with any meaningful action.

Any constructive opinions welcome

jonesMUFCforever

Your husband may have arranged the loan but both of you must have signed the agreement.
Personally I don't thinkyou have a leg to stand on.
Sorry!

xtinecop

Yes we both signed the papers, we are jointly and severally liable for the loan and of course I really should have studied that small print. It's always easy to be wise in hindsight. I am not the most financially savvy person but I do know when I am being ripped off! And most financial institutions are more than happy to do this to again and again.

However my point was more of a general one really of the fairness or otherwise of front loading the PPI premium on to the loan, and then offering a measly amount should you decide to pay off the loan it after before term. So in effect they will receive £23,000 for providing us for one years cover of PPI, which by anyone's standards, is a nice little earner.

I am sure if this practice was made more explicit then many people would not take out this insurance.

I don't think this principle is applied to other types of insurance eg if you decided to cancel your car insurance half way through the year you would expect to pay for the amount used and perhaps an adminstration fee.

And at the risk of repeating myself clearly the FSA think this is unfair too as was reported in the Financial Times recently.

Perhaps I don't have leg to stand on legally or otherwise but that does not make the practice fair, does it? I would not expect to receive the whole amount either just a realistic amount pro rated to the time we have had the loan.

If anyone has any CONSTRUCTIVE advice then it would be most welcome.

regularsaver1

You would not have paid the full £24k - that is your assumption

was this sold since FSA regulation - if so it would have been in clear bold, not small print, the cost to repay

xtinecop

Sorry but I am not sure what you mean by we would not have paid the 24K - that was the premium quoted and that is the amount which has been front loaded to the loan. I am not sure why you think I am assuming that it is 24K it is that amount we would have paid!

If we had kept the loan this premium would have been paid and if we redeem the loan early most of it also gets paid by us. There was some talk about if no claim was made in the first five years then some of the premiums might be refunded but I think this how they might have sold it to my husband. I realise now knowing what I know that I should have gone over it with a fine toothcomb - I was reluctant to take out the loan (wanted to downsize instead) but I stupidly trusted him with the details. And the way we structured our finances was that he took responsibility for the repayments of the loan (or not as the case was soon to be) and I had other areas of financial responsibility.

I think the FSA report with recommendations and not regulations was only published recently. They were focusing on nil refund clauses in PPI as some insurance companies refund nothing.

It just galls me that this money will go to pay for something we have not used rather than contirbute towards much needed equity from our house sale.

I am sorry also if I sound a bit jaundiced about financial institutions and the like but from endowment shortfalls to pensions to bank charges to interest rates to selling your property to pay for care (govt for this) it seems that the balance of power is wholly weighted in their favour. And the FSA and the OFT don't really use their powers in favour of the consumer - they are weak.

regularsaver1

I mean you make it sound like you paid £24k for one years cover - it surely can't be that much

i'd ask them a for a full break down in writing

robert_harper_2000

I had insurance, well brother did and I went through the usual channels ( I've e-mailed the template ) I got no where but actioned court mine was only for £600 PPI but they backed down straight away. Try the channels set out, then go to court keep on and they back down.

Were you self employed or was it suitable? Did they explain it was it properly explained and what it did - if no then it is mis-sold.

It doesn't matter if you signed it or not - they have to sell suitable products not trick people into unsuitable products. DON'T STAND FOR IT

Good luck

xtinecop

Thanks. Yes I think we will continue to get a higher proportion back than they are offering at the moment.

And to regular saver 1, in effect they are saying that the cost of the PPI for the life of the loan is 24K and if you cancel at any time then you will only get a minimal sum back hence my gripe about paying 23K for just over one year's protection. That's what they do sell you a policy, which is front loaded onto the loan - if you wish to settle early, which is what we are doing then you do not get any back or you receive a small refund.

Thanks again for replies.

regularsaver1

so how much loan did you borrow? and what is your settlement - this may explain a few things

but i'd definately ask them for their calculations

say for example you had won the lottery and repaid after 3 months - you will repay the interest accrued to them on the loan plus the insurance and interest on that - not the whole insurance