First Plus Offer letters issued

Niggly_2

Barclays FP have started issuing calculation letters with notices of acceptance where they state they will pay on completion in 28 days. Good news for pre April 21st claimees. Thing is I have seen three. One had the figures back to front although cheques added up to correct total. One missed out the refund of ppi payments and quoted a much lower interest payment and the third instead of crediting the balance of ppi payments off the loan they debited it adding the payments back on to the account instead of off it.

Message be very cautious of FP offer letters. Just a warning. I will keep you updated as and when re First Plus

N :cool:

di3004

Thank you for posting this up Niggly.:T

gadgets.loco

I got my offer letter last night from Barclays, the refund amount (£4,481.17/payment plus £882.26 simple interest) seem reasonable enough (59 months of payment). The problem I have is with the new monthly loan repayment amount if I opted to receive the refund via cheque, it increased my monthly payment by £1.89 :mad: instead of reducing the amount by £75.95 (£4,481.17/59 months).

Here are the original details:
Cash Loan £41,000.00
PPP Loan £8,171.30
Total loan £49,171.30
Initial monthly repayments £430.16
Current monthly repayment £457.38
Number of repayments 300
date loan signed 15/9/2006
PPI complaint mailed on Feb 7, 2011

details on offer letter:
A Refund of payments made for PPI £4,481.17
B 8% per annum simple interest £882.26
C Total refund (= A + £5,363.43

D Original PPI Policy £8,171.30
E Interest incurred due to PPI £4,076.97
F Total value of loan reduction for PPI (= D + E) £12,248.27

Refund received via cheque
H Outstanding balance £46,699.71
I Revised loan bal without PPI ( = H - F) + A £38,932.61
J New monthly loan repayment £459.27

At first I was thinking that the increase with the recalculated monthly payment could have just been sloppy work by Barclays but when I read Option 1 in acceptance form, I am no longer sure . This is the text:

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copied from letter

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Option 1: I wish to receive the payment of £5363.43 via two cheques, £4481.17 for the payments I/we have paid in respect of the payment protection insurance and £882.26 for the 8% simple interest in full and final settlement of my/ our complaint.

I understand my account will be rescheduled to take into account the amendments to the premium and interest and that this rescheduling may result in the balance of my/ our loan to increase due to the cashback payment already received.

Explanation: We will refund the monthly payments made towards the payment protection insurance premium to you and then apply the interest paid on the insurance premium to the loan balance. As the cashback element of the PPI product has already been claimed, this may result in an increase of your loan balance and your monthly repayments. The monthly payments due will then be rescheduled accordingly.

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I cannot understand why the repayment amount has not gone down when the loan principal has gone down from £46,699.71 to £38,932.61. I will call them once they open.

Also, in the acceptance form it noted that the interest component of the refund will be applied against the loan balance, this will be another £882.26 reduction to the loan balance but it does not seem to be factored in the recalculated monthly repayment amount. :mad::mad: I would prefer to also receive this cheque but that option does not seem possible.

My apologies for the long reply but it does seem that as what Niggly noted, be cautious :mad:

Niggly_2

As the cashback element of the PPI product has already been claimed, this may result in an increase of your loan balance and your monthly repayments. The monthly payments due will then be rescheduled accordingly.

You havent had the cash back have you? This loan is less than 5 years old?????????????

The figures have been taken off the loan balance with protection correctly. The new payment doesnt seem right. Here we go.

N

Niggly_2

The above figures dont make sense in so many areas its hard to know where to begin or explain it. I will try though

The original loan was £41000 over 25 years
The ppi loan was £8170.31
The total loan is £49,171.30

The figures for redress are
A Refund of payments made for PPI £4,481.17
B 8% per annum simple interest £882.26
C Total refund (= A + £5,363.43

This is the amount that should be refunded to you

D Original PPI Policy £8,171.30
E Interest incurred due to PPI £4,076.97
F Total value of loan reduction for PPI (= D + E) £12,248.27

This is the amount that should be taken off the loan

This is where the figures dont begin to make sense. I quote

H Outstanding balance £46,699.71 This is a settlement figure i.e. whats left on the loan including ppi.Why is this more than the principal loan £41000. Anyway lets go with this figure and take off the the ppi of Total value of loan reduction for PPI (= D + E) £12,248.27

This leaves a balance of £34451.44 The loan repayments should be based on this.

I have calculated you have 20 years left on the loan and the interest payments are currently 10.6% APR
£34451.44 X 20 years at 10.6% is £346.27

However they have debited the account with the ppi premiums you have paid. In other words added the £4,481.17 back onto the loan account. So lets run with this for now.

£34451.44 + £4481.17 = £38932.61 x 10.6% over 20 years is 391.31 NOT £459.27

tHIS WOULD REDUCE YOUR PAYMENTS BY £457.38 - £391.31 = £66.07

The likely cause here is that the interest rate entered into the calcs by FP is wrong

N

gadgets.loco

Thank you Niggly - no cashback has been taken and the outstanding balance £46,699.71 is for both the cash and PPI loan, so your calculations are spot on.

I did call Barclays and the person that answered my call said that he did not have access to the letter sent so has arranged for a call back within 48 hours :mad:.

Based on my initial suspicions and supported by your calculations, I will not sign the acceptance form until they correct the error on recalculated monthly payment amount.

I will also follow up on the the part of the acceptance form that indicated that the second cheque will be applied against the loan instead of being sent to me.

Thank you once again Niggly for redoing the calculations to determine the correct monthly payment amount.

Niggly_2

I have calculated a new loan fig £38932.31 x 20 years. To get 459.27 you need an interest rate of 13.1%. I assume you arent paying 13.1 %

What are these people like. This is the 4th offer I have seen thats incorrect in less than 24 hours.

Please come back with the result of your calls I hope the above may shed some light on it.

What will happen to people that trust in the figures quoted.

I feel a phone call to the press coming on soon.

N

Niggly_2

gadgets.loco wrote: »

Thank you Niggly - no cashback has been taken and the outstanding balance £46,699.71 is for both the cash and PPI loan, so your calculations are spot on.

I did call Barclays and the person that answered my call said that he did not have access to the letter sent so has arranged for a call back within 48 hours :mad:.

Based on my initial suspicions and supported by your calculations, I will not sign the acceptance form until they correct the error on recalculated monthly payment amount.

I will also follow up on the the part of the acceptance form that indicated that the second cheque will be applied against the loan instead of being sent to me.

Thank you once again Niggly for redoing the calculations to determine the correct monthly payment amount.

Lets be clear here you will get back the ppi overpayments as a cheque the ppi single premium and the interest paid on this gets taken off the loan. The 8% is paid to you too.

If you wanted you can take off the ppi overpayments from the loan reducing the cash balance on the loan further i.e.£34451.44 X 20 years at 10.6% is £346.27

N:cool:

Niggly_2

Have seen more error strewn offers from FP today.

Be absolutely clear. If you havent had the cashback you are due the premiums paid to the policy plus 8% interest. The ppi premium plus interest paid will be deducted from the loan and future payments will reduce by about 20% or the amount you paid to the ppi each month. ANYTHING ELSE IS WRONG.

If you have had the cashback the refund will be different but the total claim will equate to a little more than the cash back premium. If this is all taken off the loan the payments should reduce by the ppi or 20%.

Thanks N

Dizzywithmoney

Hi

As I mentioned the other day I got my offer letter from First Plus and to be honest was pleased with it - never even doubted that it would be wrong, just annoyed with myself for going with a company but it was the first one that I did. I never told you about the calculations but anyway they are as follows:

Original PPI POlicy - £15,183.80
Interest incurred due t PPI - £2,382.67
8% Simple interest - £4,094.21
Less early settlement - £2,274.83 (we paid this off after around 2 years)
Total amount offered £19,385.85

I am totally happy about this - apart from the 25% we have to pay the claims company of course!!!

Hammy11

Hi

After reading Nigglys warning about checking FP figures are correct, can someone check my offer that I received in the post today please?
Here are the original details:
Cash Loan £30,000.00
PPP Loan £7347.00
Total loan £37347.00
Initial monthly repayments £300.32
Current monthly repayment £318.00
Number of repayments 240 months
date loan signed 14/10/2006
PPI complaint mailed on Oct, 2010

details on offer letter:
A Refund of payments made for PPI £3634.55
B 8% per annum simple interest £563.16
C Total refund (= A + £4197.71

D Original PPI Policy £7347.00
E Interest incurred due to PPI £2840.38
F Total value of loan reduction for PPI (= D + E) £10187.38

Refund received via cheque
H Outstanding balance £33167.88
I Revised loan bal without PPI ( = H - F) + A £26615.04
J New monthly loan repayment £257.15

Does this make sense?
Even though we're pleased with the offer, I want to make sure we're getting back what we should - does this seem accurate?
We pay £60 PPI insurance which is due to end in Oct this year then we'll be finding a much cheaper alternative!

Thank you in advance!