Is the law on PPI refunds about to change?

Reclaim_Dave

Hi, i have been in contact with Barclays about reclaiming the PPI on my loan (reason: felt i didn't have a choice, and had to accept it)

following the steps listed in the template letters of this site

They came back favourably, but the problem i have is my loan is still current and runs until next June.

So they calculated the PPI element of how much i have paid so far and were willing to refund that, and then re-calculated the remaining balance of the whole loan and offered me a new loan to pay that off.

But that confused me, as it meant that my monthly payment would increase by quite a lot for the last year of my loan because of the re-calculation of the loan interest?

So i asked if i could just come back in June 2011 and put the claim for the PPI part of the loan in then.

They said yes - at the moment - but if the FSA change the law on re-payment of mis-sold PPI then they may not have to refund it anymore (my loan started in June 2006)?

i've tried asking the FSO & FSA if the law will change between now and next June, but they cant answer that, and i'm wondering if anyone out there knows about that?

it would be nice to wait until then and get the PPI all in one lump sum, but looks like i should cut my loses and accept that i will loose some of the refund in there special way of re-calculating the remainder

Premier_2

The interest rate shouldn't change when they refund your PPI.

If the balance reduces, they may calculate a new rate of repayment (to ensure the loan still ends on the same date) but if the interest rate stays the same and the loan period stays the same then the amount to be paid (monthly?) should reduce.

And of course you won't be paying PPI in future either.

"Your chances of success may be reduced if you have been aware of the misselling for some time," ... so reclaim now!

marshallka

If Barclays have admitted misselling and are redressing for it in full then they would usually calculate as follows.

They would calculate how much of what you have already repaid to them went toward the PPI and its interest and pay it you back with 8% statutory interest on top.

They would then calculate how much of the remaining balance of the loan would be because of the PPI and take that amount away it (which in effect gives you the balance as if you never had PPI at all) and then start up a new loan with whatever months are remaining. This new loan should be at the same rate of interest as your previous loan and also your repayments should be less because you no longer of the element of PPI in them.

dunstonh

There was an article in the last few weeks that said the FSA will be putting in timebars on widespread complaints issues. PPI has become such an issue and although there isnt a timebar yet, it is probably best to assume that one will exist in future.

The FSA sets the timebars. Not the FOS. The FOS will act on FSA rulings.