First Plus Offer letters issued

robbiepeck

robbiepeck wrote: »

We got our offer through today and it goes as follows...

Original loan - £62,000
PPP loan - £15,183.80
Interest - 9.06%
First payment - 1st May 2006

Current interest rate is approx 10.6%

Our loan is 63ish months in to a 300 month term.

A...Refund of payments made for PPI - £7303.10
B...8% per annum simple interest - £1670.98
C...Amount of Arrears offset - £4079.66
D...TOTAL refund (=A-C) plus a separate check for B - £3223.44

The following calculations show how the refund will effect my loan:

D....original PPI policy - £15183.80
E...Interest incurered due to PPI - £8222.64
G...Total value of loan reduction for PPI premium + interest - £23406.44

H...Outstanding balance - £81704.72
I...amount of arrears - £4079.66
J...Loan balance without PPI (=H) - £81704.72
K...NEW MONTHLY LOAN AMOUNT £559.10

The offer letter has only one option:

Apply the payment of £7303.10 to the balance of the loan in full & final settlement

Not receive a refund of the monthly paymentsmade towards the PPI & the loan account will be rescheduled accordingly - reducing payments

we will receive 8% £1670.98 by Cheque

Offer explenation:
We will credit the monthly payments made towards the PPI less any outstanding arrears to the account & then apply the interest paid on the insurance premium plus the full premium to your loan balance. This will result in a reduction of your loan balance & monthly payments which will be greater than option 1, but no immediate refund will be made. The monthly payments due will then be re scheduled accordingly.

WOW.

Just spoken to First Plus - they are so understaffed you have to feel sorry for them!

The chap I spoke to said J looks wrong & there should be 2 offers so a new offer will be sent out in the next 5 days!

By the time this is sorted, I'll have made another payment & we'll have to go throught it again!

Niggly_2

robbiepeck wrote: »

Just spoken to First Plus - they are so understaffed you have to feel sorry for them!

The chap I spoke to said J looks wrong & there should be 2 offers so a new offer will be sent out in the next 5 days!

By the time this is sorted, I'll have made another payment & we'll have to go throught it again!

Most of the letter is wrong

You should have 2 options shown the figure J is not without PPI its is with PPI INCLUDING i THINK THE ARREARS.

The new figs should show otion 1 with the PPI premium and interest taken off and add back in the PPI contributions.

Option 2 should show all the refunds and you just keep the 8%. sHOULD MAKE A DRAMATIC DIFFERENCE TO NEW MONTHLY PAYMENTS.

Please make sure they do not charge twice for arrears in next round of figs. The £81000 + should have this included. So no taking it off again.

N

Niggly_2

debasur wrote: »

Niggly
could you please look at the offer i have received today to check if it seems ok. The one problem i think is there is that the 8% interest per annum seems to be only for one year. Should this be per year from when i took the loan, the period the loan was running or the period from when it was paid off to now?

A.Original PPI Policy £6975.50
B.Interest accrued due to PPI £1380.75
C.8% simple interest £655.09
DLess early settlement £691.26
F.Total Value of refund=(A+B-D)excluding C £7664.99.

Add on C. 8% simple interest and grand total is £8320.08


Loan was for £35,000
PPI £6975.
Taken out in July 2005 and settled in April 2008.Looking back in the paperwork from SAR request early settlement rebate was 691.26.

I got a F in maths at school so any help much appreciated

On early settlement the ppi less rebate will have been paid off. So they owe you 8% interest on £6284.24 from April 2008 until Aug 2011. This is 40 months so £6284.24 x 8% / 12 x 41 = £1714.28

£1714.28 NET OF 20% TAX 342.86 = £1371.42

So looks about right.

N:beer:

Niggly_2

MUM40 wrote: »

Niggy,
I have now located the original docs and the figures are:

Loan GBP 60.000.00
ppi gbp 11,958.00
number of payment 180
first payment 28th august 2005
payment: loan: GBP 627.11
PPI payment: GBP 124.99

Current payment 785.00 @ 10.7% interest

I have also edited my original post with new updated figures, can you please check these and let me know if these are okay. I'm thinking that our payment should be reduced by 124.99 per month, as we have no PPI cover?

thanks a lot for all your help.

Right afraid this will need some explaining. So hope you are sitting comfortably.

In the begining Mum bought a loan and was offered a PPI policy that if she didnt claim on then the amount of £11958 would be returned as a benefit under the policy. Think of it as a savings plan said the very nice salesman.

If you work it out from the figures you will have paid £125 over 5 years (more because interest rates have risen) that means you have made a contribution towards the cash back of £7500.

Flashforward 5 years and you have not claimed the policy stops and the benefit under the loan is taht you recieve £11958. This means that £4458 has to be paid over by FP.

Okay says you the payments will now reduce by £125 per month and FP have lived up to the promise they made you by returning the cashback as a benefit under the policy. Oh good says you I have made £4458 in profit and anyway FP will have managed to make this up through the long term charges some way.

Then the big bad FP say oh by the way the £125 is a charge that will be maintained for the next 20 years meaning you will have to shell out another £30000 out on interest coupled with the £7500 in the first 5 years. This means that you Payout a total of £37500 pound for the policy and have only recieved back £11958 of which £4458 was a kind of top up loan from the kind FP people.

So in total you will be down £25542.

Having been told off by the government the naught people at FP listen to big brother Mr Barclays and say dont worry we know when we get it wrong and we shall pay you back all that you are owed as if that nasty PPI policy never existed. However the naught FP people still couldnt resist misbehaving and thought how can we look like we are giving a refund but make as much on this situation as possible.

Well I will tell you what they are doing shall I:

That £4458 as a top up hasnt actually been refunded. Oh no they have left this on the settlement figure after the ppi refund calculations have been done. This means that the settlement fig without PPI is £4458 more than it should be. They argue that the money has been lent and thus can not be refunded. Also this will then cost extra throughout the period of the loan. £4458 over 20 years at 10.7% is 45.11 per month meaning an extra £10,825.99 will be paid as a direct result of the cash back.

If this £45.11 per month didnt exist and you were to put all the ppi refund into the loan as per option 2 the reduction in payment per month would be
k) new monthly balance GBP 696.00 = 696.56 - £45.11 =651.45

Which is the equivalent of taken off your current PPI payments.

So in order you get the compensation you require you should demand that this amount be taken off the without PPI settlement figure.

Now as we know the naughty people at FP may say well thats not fair. But the headmaster FOS has said the following when redress is given on Single premium PPI. tHEY WILL NEED REMINDING OF THIS BUT HERE IS THE RELEVENT legislation.

DISP App 3.7.2 Evidential01/12/2010
Where the firm concludes that the complainant would not have bought the payment protection contract he bought, and the firm is not using the alternative approach to redress (set out in DISP App 3.7.7 E to 3.7.15 E) or other appropriate redress (see DISP App 3.8), the firm should, as far as practicable, put the complainant in the position he would have been if he had not bought any payment protection contract.
DISP App 3.7.3 Evidential01/12/2010
In such cases the firm should pay to the complainant a sum equal to the total amount paid by the complainant in respect of the payment protection contract including historic interest where relevant (plus simple interest on that amount). If the complainant has received any rebate, for example if the customer cancelled a single premium payment protection contract before it ran full term and received a refund, the firm may deduct the value of this rebate from the amount otherwise payable to the complainant.
DISP App 3.7.4 Evidential01/12/2010
Additionally, where a single premium was added to a loan:

(1) for live policies:

(a) subject to DISP App 3.7.5 E, where there remains an outstanding loan balance, the firm should, where possible, arrange for the loan to be restructured (without charge to the complainant but using any applicable cancellation value) with the effect of:

(i) removing amounts relating to the payment protection contract (including any interest and charges); and

(ii) ensuring the number and amounts of any future repayments (including any interest and charges) are the same as would have applied if the complainant had taken the loan without the payment protection contract; or

So endeth the lesson. You will need to complain to FP telling them why using tha above story less dramatics as the basis of complaint and then throw in the legislation as to why they should.

I know I am right and I know eventually the FOS will find in our favour. But try this with FP first and see how they respond. It may be a case of having to fight every inch of the way but they cant be allowed to do this to you or others in a similiar situation:beer:

Cheers N

debasur

Niggly

thanks for the reply.
So the payment apart from the simple interest is taxable?

On the offer letter i have it says the 8%simple interest is paid gross and therefore no tax (down to me to notify the IR).

If the figures all look good to you then i will post my acceptance in the morning.

Thanks again

:beer::beer::beer:

Niggly_2

debasur wrote: »

Niggly

thanks for the reply.
So the payment apart from the simple interest is taxable?

On the offer letter i have it says the 8%simple interest is paid gross and therefore no tax (down to me to notify the IR).

If the figures all look good to you then i will post my acceptance in the morning.

Thanks again

:beer::beer::beer:

If the figure they have quoted says gross its wrong. Send them my calculations and ask for requote. Or call and say are you positive the interest is gross get someone to check it.

Bet the idiots have worked on the contributions made to the ppi during the loan and paid 8% on this.

N:mad:

debasur

Oh, now i`m confused.
I took it as only the 8% simple interest per annum (£655.09) will be made gross and no tax deduction.

The other interest payment "interest accrued due to the ppi policy £1380.75" does not say anything about tax.
The way you explained in your calculations i feel sure they have already deducted the tax from it. I did not know tax was deducted from ppi succesful claims.

Niggly_2

debasur wrote: »

Oh, now i`m confused.
I took it as only the 8% simple interest per annum (£655.09) will be made gross and no tax deduction.

The other interest payment "interest accrued due to the ppi policy £1380.75" does not say anything about tax.
The way you explained in your calculations i feel sure they have already deducted the tax from it. I did not know tax was deducted from ppi succesful claims.

OH s././ sorry.

Please accept my apologies.

The 8% figure is wrong I am right. Please tell them to recalculate the simple interest from April 2008 to August 2011. Based on the £6284.24. This is 40 months so £6284.24 x 8% / 12 x 41 = £1714.28.

Sorry again:o:o

debasur

hey no worries niggly, i appreciate your advice..

so to sum up they are offering me only 1 year 8% simple interest. It should be from when i paid off the loan early to now-- April08 to August11 (roughly 3 years interest, figure C in the calculation)

Will phone them tomorrow, so glad you have verified that for me , thats another few grand they are trying to keep i guess!

Niggly_2

debasur wrote: »

hey no worries niggly, i appreciate your advice..

so to sum up they are offering me only 1 year 8% simple interest. It should be from when i paid off the loan early to now-- April08 to August11 (roughly 3 years interest, figure C in the calculation)

Will phone them tomorrow, so glad you have verified that for me , thats another few grand they are trying to keep i guess!

Thats correct:o