lloyds tsb and scottish widows ppi claim

varney15

I wonder if anyone can advise me on a similar problem?
In 1995, I took out a mortgage with Lloyds TSB. They insisted that I had to take out a MPP with them. It was described as a Mortgage Protection Plan, but was for life cover only and covered the duration of the mortgage. The MPP was originally with TSB Life, then transferred to Scottish Widows. I have not been self-employed.
This does not seem to fit under the definitions I have read for the mis-selling of PPI's. Could anyone advise?
Also, Scottish Widows continued to take payments from my bank account some 3 years after I changed address and lender. Would I have any grounds for reimbursement?

magpiecottage

varney15 wrote: »

In 1995, I took out a mortgage with Lloyds TSB. They insisted that I had to take out a MPP with them. It was described as a Mortgage Protection Plan, but was for life cover only and covered the duration of the mortgage.

Banks tended to insist on life cover for mortgages in those days and were within their rights to do so.

The MPP was originally with TSB Life

They offered a product from their own insurer. Although probably not very competitive they were entitled to do that.

then transferred to Scottish Widows.

Who Lloyds TSB purchased and then adopted the brand name.

I have not been self-employed.

Which makes no difference to whether a life policy pays out. You either die and it pays out or you carry on living and it doesn't.

[/quote]This does not seem to fit under the definitions I have read for the mis-selling of PPI's.[/quote]

That is because it isn't PPI

Scottish Widows continued to take payments from my bank account some 3 years after I changed address and lender.

That is because they are contractually obliged to maintain cover provided you continue to pay the premium and you instructed them to collect it by direct debit. The onus is on you to tell them if you want to change that instruction.

Would I have any grounds for reimbursement?

No

src007

tumulus wrote: »

. In each case the settlement figure was more than it should be.

If you paid (for example) £50 per months for the the PPI for 10 months, you would be due back:

£500 for the monthly payments. + 8% simple interest on each £50 payment from the date it was made until the present.

As well as this the loan settlement figure would have been higher because of the PPI. The PPI elelment of the settlement would be refunded + you would get 8% simple interest on the PPI settlement amount from the date the loan ended, until the present.

The ''rebate'' isn't a rebate at all because you're paying MORE for the insurance on early settlement.

It was nice of them to charge so much!

Because Lloyds are there for the journey. :rotfl:

tumulus

Thank you very much scr007, and for everybody's kind help.

Could you or anyone else just look at my maths to make sure I'm on the right track. I've been following what the FOS recommends in working out the difference between taking the loan for the amount I wanted without PPI attached and billing Lloyds for every difference along the way.

Here goes for example:

This is what SHOULD have happened: In Jan 2001 I was offered a £10k loan. The arrangement fee was £250, making the total loan £10,250. The rate was 9.12% making a monthly payment of £211.29, and I paid the loan off after 26 months (with no penalty) at a cost of £6309.72

This is what ACTUALLY happened: I was given no option but to accept a mandatory PPI of £775.28 (paid for in full up front), making the loan total £10925.28, the monthly payments now becoming £227.43, and when I paid off the loan after 26 months it cost £6781.86 to do so. Over two years later I received an unexplained "rebate" of £342.54

So, for me (following FOS guide) I charge Lloyds for:

(a) Single PPI Premium: £775.28 + 8% simple interest from Jan 2001 for the full cost of the PPI (=£1417.25)
(b) Monthly PPI Premium: £227.43 - £211.29 = £16.14 for the monthly cost to me of the PPI x 26 months, and with each payment having 8% simple interest from the time each was paid. (=£729.39)
(c) Settlement difference due to PPI: £6781.86 - £6309.72 = £472.14 which with added interest by the time the rebate arrived two years later would be £551.51, which after deducting the 'rebate' leaves £208.97 still owed to me from that date, from which I add 8% simple interest (=£310.42)
(d) A one-off charge for the time, trouble and aggravation involved in working all this out = £250 (on a par with their initial arrangement fee)

(a) + (b) + (c) + (d) = £1417.25 + £729.39 + £310.42 + £250

= £2707.06


Is this right?

src007

I wouldn't get too hung up on the figures. It's more important that you get the mis-selling reasons right for your letter.

Lloyds have a standard way of calculating PPI refunds and your figures won't make a difference (at the end you may want to double check they've offered a full refund, but they normally get it right!).

For the figures, I think you're over estimating. You need to take out a) and d).

Think of when the money actually came out your wallet for the PPI and how long you've been without it (the 8% interest is for the amount of time you've been without the money). You didn't pay towards the insurance on day one because they were giving you the loan. You started paying back the PPI with each monthly PPI payment. The rest of the PPI was paid back on early settlement.

For the distress and inconvenience (rightly or wrongly) an amount is only awarded for the way your lender deals with the complaint, not the sale itself. So you'll only get £100-£200 if they reject the complaint and it is upheld at the FOS.

I hope this helps. Good luck!

tumulus

Many thanks src007 - I understand your reasoning.

However, regarding the charge (a) my understanding was that since the full amount for the PPI product was deducted from my account at the very beginning of the loan, it was therefore a 'product' which had been paid for in its entirety once and for all. I had no option but to accept this 'product' in its entirety if I wanted the loan, even though I wouldn't have accepted it if they had told me it wasn't mandatory to accept it. The fact that the bank simultaneously added the same amount (equivalent to the PPI) to the lump sum loan amount they gave me is therefore their doing, about which I was given no choice. It wasn't what I wanted, but had to accept.

Isn't the single premium PPI fully paid for upfront a mis-sold entity in its own right, chargeable at interest for the full amount at that moment, and the fact that the bank try to make it 'balanced' by simultaneously adding more to the principle loan amount requested being a red herring since they are charging me for the privilege of this higher amount anyway and dictating that I 'must have it'?

The 'extra' amount of loan is not what I asked for, it is what they told me I must accept if I wanted a loan at all.

This made sense to me when I saw an online single premium PPI calculator which included this amount to be reclaimed as well as the monthly aspect due to the higher repayment charges.

I thought the mis-selling aspect was for the actual insurance product in its totality not just the monthly effect it had on my repayments.

I stand to be corrected on this!

src007

Your right that its bought upfront. But its Lloyds that buy it on day one, rather than you and you have to pay them back.

Basically, they buy EVERY monthly PPI payment for the whole loan which forms part of the loan. Then they charge interest on the entire lump-sum of the insurance, for the entire time the loan's running.

Like the loan you are paying them back each month reducing the 'insurance loan' that you owe and if you settle early you pay back the remaining amount thats due.

However, what happens if you settle 40 months into a 60 month loan? You could say, 60 months of insurance has been bought (on day one) however only 40 months has been used and so you're due back 20 months as a rebate.

However Lloyds (kind as they are) may only give you a 10 month rebate and charge you for the 10 months you didn't even use.

I hope I'm getting this right because it involves some mental gymnastics. :rotfl: :rotfl:

The shocking thing is that these complications serve absolutely no purpose other than to trick people out of money. Hence the PPI scandal and a £3.2 Billion mis-selling bill for Lloyds Group.

src007

They should also have made clear it was optional.

It's up to you, if you have PPI or not.

Although this can sometimes be a hard point to prove.

robbedofmymoney

tumulus wrote: »

Many thanks src007 - I understand your reasoning.

However, regarding the charge (a) my understanding was that since the full amount for the PPI product was deducted from my account at the very beginning of the loan, it was therefore a 'product' which had been paid for in its entirety once and for all. I had no option but to accept this 'product' in its entirety if I wanted the loan, even though I wouldn't have accepted it if they had told me it wasn't mandatory to accept it. The fact that the bank simultaneously added the same amount (equivalent to the PPI) to the lump sum loan amount they gave me is therefore their doing, about which I was given no choice. It wasn't what I wanted, but had to accept.

Isn't the single premium PPI fully paid for upfront a mis-sold entity in its own right, chargeable at interest for the full amount at that moment, and the fact that the bank try to make it 'balanced' by simultaneously adding more to the principle loan amount requested being a red herring since they are charging me for the privilege of this higher amount anyway and dictating that I 'must have it'?

The 'extra' amount of loan is not what I asked for, it is what they told me I must accept if I wanted a loan at all.

This made sense to me when I saw an online single premium PPI calculator which included this amount to be reclaimed as well as the monthly aspect due to the higher repayment charges.

I thought the mis-selling aspect was for the actual insurance product in its totality not just the monthly effect it had on my repayments.

I stand to be corrected on this!

hi

i'll go over the figures as if it were being calculated in line withthe FOS guidance for you in the morning whne i have a clear head (been working from early this morning)

robbedofmymoney

tumulus wrote: »

Thank you very much scr007, and for everybody's kind help.

Could you or anyone else just look at my maths to make sure I'm on the right track. I've been following what the FOS recommends in working out the difference between taking the loan for the amount I wanted without PPI attached and billing Lloyds for every difference along the way.

Here goes for example:

This is what SHOULD have happened: In Jan 2001 I was offered a £10k loan. The arrangement fee was £250, making the total loan £10,250. The rate was 9.12% making a monthly payment of £211.29, and I paid the loan off after 26 months (with no penalty) at a cost of £6309.72

This is what ACTUALLY happened: I was given no option but to accept a mandatory PPI of £775.28 (paid for in full up front), making the loan total £10925.28, the monthly payments now becoming £227.43, and when I paid off the loan after 26 months it cost £6781.86 to do so. Over two years later I received an unexplained "rebate" of £342.54

So, for me (following FOS guide) I charge Lloyds for:

(a) Single PPI Premium: £775.28 + 8% simple interest from Jan 2001 for the full cost of the PPI (=£1417.25)
(b) Monthly PPI Premium: £227.43 - £211.29 = £16.14 for the monthly cost to me of the PPI x 26 months, and with each payment having 8% simple interest from the time each was paid. (=£729.39)
(c) Settlement difference due to PPI: £6781.86 - £6309.72 = £472.14 which with added interest by the time the rebate arrived two years later would be £551.51, which after deducting the 'rebate' leaves £208.97 still owed to me from that date, from which I add 8% simple interest (=£310.42)
(d) A one-off charge for the time, trouble and aggravation involved in working all this out = £250 (on a par with their initial arrangement fee)

(a) + (b) + (c) + (d) = £1417.25 + £729.39 + £310.42 + £250

= £2707.06


Is this right?

having looked at the way you have carried out the calculation (without checking the figures) it would appear thet there is an error if it is to be calculated in line witht he FOS guidelines

that being you would not get (a)

only the premiums you actually paid on a monthly basis (b)
and the difference in settlement less any rebate (c)

and of course the 8% simple interest.

you would only have a chance of getting a payment for trouble and aggravation (d) if it were to actually go to the FOS, and then it may not even happen then.

if you want me to do full calculations i would need to know the following for each loan

amount of loan
amount of ppi
interest rate
term of loan
repayment date/number of payments
what the monthly ppi repayment was
and start date of each loan
and which rebate was applicable to which loan

i appreciate some of the information has already been posted, but would need all of the above to do it properly.

on the loan where you have given more detail (the loan above)