F&F Settlement and Mis-sold PPI

helphelphelphelp

Could anyone answer this please on behalf of my friend?

He has a loan with Santander, o/s balance approx. 15k. He has defaulted on payments with this loan and is currently paying agreed reduced amounts. He originally took out PPI on this but it was cancelled (wont go into the story) but long and short of it is that he claimed for mis-sold PPI and they offered him approx. £6k.

However, they have said that although they have offered him this money for the PPI it must be used to pay off arrears of the loan.

So the questions I have are:

Can they dictate where the money goes to? I would have thought the insurance and loan are two separate entities and they cant say the money needs to be paid to his loan. He also is in default with other loans (approx 20k) so surely if he is given a lump sum this should be shared evenly with all creditors?

I am thinking it would be worth him asking for a F&F figure and waiving the PPI amount in lieu of the PPI so neither side gets any money. Do you think they would go for this?

Thanks for your help

DNW_2

helphelphelphelp wrote: »

Can they dictate where the money goes to? I would have thought the insurance and loan are two separate entities and they cant say the money needs to be paid to his loan.

I'm not sure about the rest of the question, but in terms of the PPI, I guess they are allowed to do this as part of the 'setting-off' rule in so much as the £6000 would be held in credit by Santander which then allows them to use it against anything owing to them.

I'm sure someone else will be along with more helpful info though!

amersall

Agree with DNW,they can use it off the loan as this is in arrears,you could ask for a full and final,but they may reduce it by less than the ppi redress.