MINT (RBS) offer received - not sure if interest is correct?

Munro_Bagger

Hi everyone! My OH has just had his PPI complaint upheld (hurray!). I used the bank charges calculator before the complaint was sent off, plugging in all the amounts and dates, so that he could get an idea of the compound interest. However, their offer, and my calculations, do not add up! Can anyone help please?

- Total premiums paid 04 April 2004 - 04 Jan 2007 = £804.24 (I agree) (can supply dates and amounts if needed)
- Compound interest, based on interest rate charged on card = £160.52 (I can't find anything that tells me what that rate was)
- Additional payment for >8wks to resolve@8% simple = £4.02
- Less tax@20% = £0.80
- Total offered (£804.24 + £160.52 + £3.22) = £967.98

My calculation for interest was £376.38 (using the bank charges calculator), which added to £804.24 gives £1180.62...a £212.64 difference!

If anyone could help, we'd really appreciate it (as always)!

Thanks

di3004

Munro_Bagger wrote: »

Hi everyone! My OH has just had his PPI complaint upheld (hurray!). I used the bank charges calculator before the complaint was sent off, plugging in all the amounts and dates, so that he could get an idea of the compound interest. However, their offer, and my calculations, do not add up! Can anyone help please?

- Total premiums paid 04 April 2004 - 04 Jan 2007 = £804.24 (I agree) (can supply dates and amounts if needed)
- Compound interest, based on interest rate charged on card = £160.52 (I can't find anything that tells me what that rate was)
- Additional payment for >8wks to resolve@8% simple = £4.02
- Less tax@20% = £0.80
- Total offered (£804.24 + £160.52 + £3.22) = £967.98

My calculation for interest was £376.38 (using the bank charges calculator), which added to £804.24 gives £1180.62...a £212.64 difference!

If anyone could help, we'd really appreciate it (as always)!

Thanks

Well done and Congratulations!:beer:

Hopefully Niggly shall be about tomorrow and check them out for you, sorry I'm not the one for workings out ;)

Good luck and again well done x

Riggsy1367

Munro_Bagger wrote: »

Hi everyone! My OH has just had his PPI complaint upheld (hurray!). I used the bank charges calculator before the complaint was sent off, plugging in all the amounts and dates, so that he could get an idea of the compound interest. However, their offer, and my calculations, do not add up! Can anyone help please?

- Total premiums paid 04 April 2004 - 04 Jan 2007 = £804.24 (I agree) (can supply dates and amounts if needed)
- Compound interest, based on interest rate charged on card = £160.52 (I can't find anything that tells me what that rate was)
- Additional payment for >8wks to resolve@8% simple = £4.02
- Less tax@20% = £0.80
- Total offered (£804.24 + £160.52 + £3.22) = £967.98

My calculation for interest was £376.38 (using the bank charges calculator), which added to £804.24 gives £1180.62...a £212.64 difference!

If anyone could help, we'd really appreciate it (as always)!

Thanks

I may be wrong (probably am) but the compound interest on a cc would only be added if the recompense takes the card into a credit balance, ie. they owe you money.

Someone more knowledgeable will be along to put you on the right path.

Well done on your win too!

Munro_Bagger

Thanks Riggsy1367 - it just seems odd to me, particularly seeing as the other credit card complaint that was upheld (Egg), gave back the PPI and compound interest at 8%...and that card is also on a DMP, with money still owed.

Riggsy1367

Munro_Bagger wrote: »

Thanks Riggsy1367 - it just seems odd to me, particularly seeing as the other credit card complaint that was upheld (Egg), gave back the PPI and compound interest at 8%...and that card is also on a DMP, with money still owed.

I thought it odd too. Some banks give it while others don't. It's hard to understand how there can be such a lack of consistency.

On the other hand, it could be me that's wrong! lol:o

Xanadu20

Munro_Bagger wrote: »

Hi everyone! My OH has just had his PPI complaint upheld (hurray!). I used the bank charges calculator before the complaint was sent off, plugging in all the amounts and dates, so that he could get an idea of the compound interest. However, their offer, and my calculations, do not add up! Can anyone help please?

- Total premiums paid 04 April 2004 - 04 Jan 2007 = £804.24 (I agree) (can supply dates and amounts if needed)
- Compound interest, based on interest rate charged on card = £160.52 (I can't find anything that tells me what that rate was)
- Additional payment for >8wks to resolve@8% simple = £4.02
- Less tax@20% = £0.80
- Total offered (£804.24 + £160.52 + £3.22) = £967.98

My calculation for interest was £376.38 (using the bank charges calculator), which added to £804.24 gives £1180.62...a £212.64 difference!

If anyone could help, we'd really appreciate it (as always)!

Thanks

I can see the compound interest on my Mint statements, if you still have any of those ?

Niggly_2

Riggsy1367 wrote: »

I may be wrong (probably am) but the compound interest on a cc would only be added if the recompense takes the card into a credit balance, ie. they owe you money.

Someone more knowledgeable will be along to put you on the right path.

Well done on your win too!

I agree 8% interest on CC works differently than loan redress. I am struggling to get my head around this.

They take a ppi payment I assume based upon the balance on the card at that point in time. The payment history over the 2 years 9 months will be compared one with ppi running and one without. The interest you are owed each month surely is the difference between the two balances. Therefore they have to pay you whatever the interest is on the card for each month a ppi is paid.Considering you have lost the use of that money plus there interest are they not having to pay you back the card interest on that premium from the point in time it was taken to when th ppi was cancelled or the card was paid off.

If you then settled the outstanding balance and ran the card with nil on it for a couple of months technically you are in credit and thus 8% must kick in too.

Sorry that hasnt helped much. I will look at the FOS worked examples again.

Niggly_2

3. Where the card account has been cleared and closed and the PPI has been cancelled:

The financial business should:

a) reconstruct the account by removing any premiums in respect of the PPI and any interest or charges in respect of those premiums;
b) if that produces a credit balance for any period, credit interest on that balance for that period at 8% simple per year;
c) pay the customer the difference between the revised closing balance and the original closing balance;
d) pay the customer interest on that difference at 8% simple per year from the date of closure to the date of payment; and
e) send the customer details of how the revised balance, the difference and the interest were calculated.

This what the redress is supposed to be. Where they are letting customers down it would seem is e). I would need a complete breakdown of the calcs before I accepted.

n

N

Niggly_2

Niggly wrote: »

3. Where the card account has been cleared and closed and the PPI has been cancelled:

The financial business should:

a) reconstruct the account by removing any premiums in respect of the PPI and any interest or charges in respect of those premiums;
b) if that produces a credit balance for any period, credit interest on that balance for that period at 8% simple per year;
c) pay the customer the difference between the revised closing balance and the original closing balance;
d) pay the customer interest on that difference at 8% simple per year from the date of closure to the date of payment; and
e) send the customer details of how the revised balance, the difference and the interest were calculated.

This what the redress is supposed to be. Where they are letting customers down it would seem is e). I would need a complete breakdown of the calcs before I accepted.

n

N

Here is a worked example. I get it now the interest payable on the PPI is refunded as they calculate the difference between the two accounts one with ppi one without.
We upheld the complaint made by Ms W on the basis that the financial business had mis-sold her the PPI policy. We decided that but for the financial business’s failings, Ms W would not have taken out the PPI policy. In her case:

• her account involved an interest rate of 18.9%, with the PPI policy costing 79p per £100 of the outstanding balance;
• the minimum monthly payment on the credit card account was the greater of either 5% of the outstanding balance or £10;
• she transferred a balance of £1,400 to her credit-card account on the first day, but from then on spent £25 every month on this account;
• she paid £75 off her credit-card bill every month; and
• after 30 months, she paid off the remaining £655 balance – using an inheritance she had received – and closed the account.

This meant that Ms W had to pay £655 when she closed the account. But she would only have had to pay £314, if she had made the same £75 payment each month without the PPI (which had resulted in a higher outstanding balance on her ongoing credit-card account that had attracted interest each month).
So we told the financial business to:

• reconstruct Ms W’s credit-card account, by deducting the PPI premiums (and the interest or charges that resulted from those premiums) to work out the closing balance without PPI;
• pay Ms W the difference of £341 (£655 - £341) between the closing balance and the revised closing balance.
• pay Ms W interest on that difference at 8% simple per year from the date the account was closed to the date of settlement; and
• send Ms W details of how the revised balance, the difference and the interest were calculated.

In Ms W’s case we did not require the financial business to make a payment to Ms W to compensate her for distress and inconvenience.
While we did not agree with the overall conclusion the financial business had reached when it replied to her complaint, we recognised that it had given appropriate consideration to the issues raised and that the complaint was not an easy one to decide. We also noted that the financial business had responded promptly to Ms W’s enquiries.





Bearing in mind the number of mistakes that have been made with all the redress so far I would want to check the figures closely before i accepted. That goes for any CC refunds.



I would love to try and work a case through by running two accounts along side each other to see what the outcome is.


N:beer:

Munro_Bagger

Thanks very much Niggly - I really appreciate you coming back with so much information! I have to say though, I'm totally flabbergasted and confused! My OH will ask for a breakdown of their calculations, and the interest rate at each stage, and I'll post back on this thread! We've had a look through the credit card statements, and on some the cash monthly interest rate is listed as 0.946%, purchases 0% and transfer & save 0%...this changes on some statements to a cash monthly interest rate of 1.019%, 1.494% and 1.872%, and on others the purchases rate is 0.945%, 1.094% and 1.313%, the same as the transfer & save rate!

We're grateful they upheld the complaint, but just want to make sure it's correct! The situation with MINT is exactly the same as EGG (who paid the PPI + 8% interest...there was no mention of compound interest based on the card interest rate). Both credit agreements were terminated at the end of 2006, and arrears on both accounts were transferred to a DMP. They are still being paid off.