MSE News: Banks lift PPI hold: complain or risk missing out

Consumerist

TeeMac wrote: »

I had to take out an IVA due to unmanageable debt following my divorce. One of the debts covered by the IVA was the NatWest loan. If I claim [mis-sold PPI], will they be able to keep all the money I am due in order to offset the amount still owing on the loan?

As I understand it, the bank can take what it is owed from the amount of your claim and the balance should be paid to you.

bluewire

This was in 2005 with Alliance and Leicester.
It is a monthly payment.
I didn't use a broker it was taken out with Alliance and Leicester along with the mortgage.

Thanks

Rednelly_2

TeeMac wrote: »

Could anyone tell me if I will be penalised if I make a claim? I took out a loan with NatWest about 5 years ago, for £25K. I was told that I couldn't have the loan unless I took out insurance - the overall cost of which was added to my loan without any explanation that this is what would happen. I know I am eligible to claim, but my problem is as follows:

I had to take out an IVA due to unmanageable debt following my divorce. One of the debts covered by the IVA was the NatWest loan. If I claim, will they be able to keep all the money I am due in order to offset the amount still owing on the loan?

I am near the end of my IVA and have made all my payments on time, and made substantial increased payments, totalling almost 3 times the amount of my original requested payments, as I gained better employment and was able to pay more.

Check your IVA paperwork. It is likely to contain a clause that reads like this:

"Where any creditor agrees, for whatever reason, to make a repayment to the debtor during the continuance of the arrangement, then that payment shall be used solely in reduction of that creditor’s claim in the first instance. If such repayment results in the creditor’s claim being entirely extinguished (after the application of set off) any surplus will be treated as an after acquired asset and offered to the supervisor for the benefit of the arrangement."

In any case the creditor is likely to take anything it is owed from the amount of your claim and then if you are still in your IVA you should provide any surplus to your IVA supervisor to put into the arrangement for the benefit of all creditors.

I note you say you are close to completing your IVA...

Consumerist

Rednelly wrote: »

I note you say you are close to completing your IVA.

TeeMac, in view of Rednelly's post, it might be worth while to wait until the IVA has finished before claiming on your PPI. The compensation will then be paid to you instead of the IVA. Just a thought.

dunstonh

bluewire wrote: »

This was in 2005 with Alliance and Leicester.
It is a monthly payment.
I didn't use a broker it was taken out with Alliance and Leicester along with the mortgage.

Thanks

That all indicates no issues. MPPI should be monthly. Its when its single premium that its classed as a mis-sale.

Consumerist

bluewire wrote: »

Can I check if people think that I may have been mis-sold.
1. When I took out my mortgage I was told that I had to take out MPPI
2. Mt wife had an existing medical condition (Previously had blood clots) I can not see this as any exclusion in the paperwork (dont really know what I am looking for) and can not remember if this information was taken from us at the time.

In general, if you were told that it was compulsory to take out the MPPI then I think there is a case for the bank to answer. Put in a claim anyway, the worst that can happen is that the claim will fail.

dunstonh

Consumerist wrote: »

In general, if you were told that it was compulsory to take out the MPPI then I think there is a case for the bank to answer. Put in a claim anyway, the worst that can happen is that the claim will fail.

If the insurance product was required to get the mortgage deal (as many have been over the years) then that is allowed. However, the insurance still needs to be compliant (i.e. eligible and set up correctly.

bluewire

So I suppose I just need to confirm if the cover is correct due to my wifes existing medical condition.

Thanks