Compound or Simple Interest?

Selim

Hi and thanks for reading.

I have a feeling this has been asked many times before as I am clearly not the first person in the world to think of this. However, I have searched and not found any replies hence the post:

I am a little confused. I have been offered a settlement which is a great step in the right direction, but feel it is only wise to request that the bank clarify exactly what they are proposing to pay me back before sending off a signed acceptance form.

I have been offere 8% simple interest per annum. Why is it simple interest and not compound? Do they not compound it themselves when they are charging you? I thought the whole point of the compensation was to put your account back to how it would have been had they not missold me the insurance, so if they have been compounding then I feel it would only be fair to request that it be compounded.

Thanks!

maxdp

Selim wrote: »

Hi and thanks for reading.

I have a feeling this has been asked many times before as I am clearly not the first person in the world to think of this. However, I have searched and not found any replies hence the post:

I am a little confused. I have been offered a settlement which is a great step in the right direction, but feel it is only wise to request that the bank clarify exactly what they are proposing to pay me back before sending off a signed acceptance form.

I have been offere 8% simple interest per annum. Why is it simple interest and not compound? Do they not compound it themselves when they are charging you? I thought the whole point of the compensation was to put your account back to how it would have been had they not missold me the insurance, so if they have been compounding then I feel it would only be fair to request that it be compounded.

Thanks!

Hi There

No the 8% interest is what a court would award if you went down that line. It is not to do with interest on your loan as such that is why it i simple interest.

marshallka

Hi, I was offered simple interest via the FOS for when I won against my bank and apparently FOS said that it is what they would find acceptable so I did not argue. I don't know if anyone has ever queried this with FOS and won so hopefully someone will be along to answer. It is annoying isn't it when they say "to put you back into the position as if you never had the PPI and it is not.

Well done on winning though.

di3004

Well done on your success.:beer: