PPI and the hidden snowball effect on bank charges

Selim

Hi and thanks for reading.

Scenario

I take out a loan with (optional!!) PPI in Feb 2003, pay it for 18 months until its completion in Aug 2004.

The loan repayment is £385.51 including PPI of £41.07.

Proposed Redress

Had I had not been paying that PPI every month my account would have been cumulatively £41.07 better off. There is at least one example where this £41.07 has taken me into an unauthorised overdraft, resulting in a charge of £20.00.

This £20.00 which I would argue is unjust also has its effect on my account in the future and so on and so on.

This literally means that my entire bank account has been on some kind of alternate 1985 path in the wrong direction for 6-7 years.

If this was applied across the board from the point of error up to today, I am confident that 99% of my charges since the PPI would not have been incurred, as I would never have been anywhere near my overdraft limit. I am also in hardship, having been on a DMP since April 09 (and arguably struggling at least a year before then).

Does this hold water?

Numerical Example

Every month you pay £41.07 your statement should be credited with £41.07.

Month 1 ==> Statement +£41.07
Month 2 ==> Statement +£82.14
Month 3 ==> Statement +£123.21
etc.
Month 18 ==> Statement +£739.26

This logic has worked with me before on NatWest when they messed up my standing order (every 4 weeks instead of every 19th of the month) resulting in the money leaving my account early. I successfully argued that my statement should be updated to reflect their error and had about £100 of charges taken off, including charges which caused me to incurr extra charges.

Any thoughts? Thanks for reading!

di3004

Hi there

Bumping this up for you, hopefully someone will be along to have a look at this one for you soon, good luck.;)

marshallka

Hi Selim, I can see where are coming from here completely and we are "never" put back into the position as if we never had the PPI because its too little too late for some.

I don't really know what sort of complaint this would be if you needed to take this up further with say the Ombudsman Servcie? Perhaps if you made the complaint to the bank stating your arguments with documents to back this up and give them 8 weeks to respond to it you may be able to take this to FOS if they disagree with you.

Hopefully someone else with give their views on this too but I agree with you completely.

Good luck

Selim

Thanks for your replies guys, it really means a lot to me!

This thinking has evolved out of my current situation with Lloyds TSB; I have been on a DMP since April 09 and paid £5,200 into it. My balance is only lower by less than £850!!

CCCS advised me that they have clearly not treated me fairly, based on my ability to pay rather than based on any commercial requirements of the bank, and that this contravenes the Lending Code.

At any rate, one thing Lloyds had done to me is told me my Current (Gold?) account was no longer active (to rip up my cards) yet they continued to try and take direct debits out of it and also charged me £8.95 a month for the privilege(!) of the account. Taking these errors into account, I can easily demonstrate that their charges are unfair, however this involves writing a lengthy letter which refers to every disputed entry in my statement to build a case from the ground up.

Now that they have also acknowledged my PPI claim I am just going to go one step further and go through all my statements with a fine-toothed comb (and type them all up ) to show exactly what my finances would have looked like had they not mis-sold me the PPI insurance.

The only counter-argument I can think of is that they might claim it doesn't matter whether or not that money was physically not taken out of an individual's account because that individual would have been irresponsible and spent that money like they spent all credit made available to them, which is rather specious if you ask me.

marshallka

Hi again Selim, I really doubt they could come up with that argument TBH cause that would be speculation of how you would spend the money rather than fact. They should address the complaint if nothing else and perhaps the FOS would take this on (not too sure on that but you could ring and ask maybe!!) if they dismiss it. I can see where you are coming from and know what "other" troubles you can have once in debt already and then being subjected to more needless debt in the way of single premiums. Its very hard (as I am sure you know) to get out of spiralling debt. Just really hope you can get them to listen to you.

Extra good luck

di3004

Good luck with this.;)

Selim

Thanks. I will update this thread. This letter is going to be a long one, and it will take ages to put all my statements into Excel but it will all be worth the slog!

liberty_lily

Hi Selim

I've responded on your other thread in the bank charges forum so won't post the same stuff here!

Basically just wanted to wish you well with this and add my support as I have a very similar situation (also with LTSB) and am planning to try something along the same lines as you.

Good Luck and do keep us posted

LL x