Worth reclaiming a year's PPI from FD?

heavy_t

In Sept '05 I took out an unprotected personal loan with First Direct which I applied for over the 'phone. At the time it was strongly implied that they would be unwilling to issue the loan without me taking out PPI. Not being in the know at the time I grudgingly caved in, as I needed the money.

One year later - thanks to articles on this site :money: - I took out Income Protection Insurance (IPI) with Antinsurance at £17 per month and restructured the FD loan, refusing to let them sell me PPI this time, and using the IPI as a negotiating point. In the process I reduced my payments from £269 to £228 per month. As the IPI covers me up to £850 a month I also cancelled PPI on my credit cards, making further savings.

My question is, should I try and calculate the previous year's PPI charges and pursue the bank for them? I've got a feeling that they calculate a total PPI figure for the loan term and you repay this first, meaning that in the year I spent paying off the loan I effectively made little or no progress? Can anyone confirm this?

I am tempted to write FD a letter requesting a summary of the total amount of PPI charged between Sept '05 and Sept '06. Would I stand a decent chance of getting it back or do I run the risk of them demanding immediate repayment of the loan?

Many thanks in advance :A

Rafter

You possibly have a misselling case against first direct, since the insurance was for your benefit and not theirs and making the loan conditional on taking the insurance is a breach of the consumer credit act.

I suggest you write to them asking for a refund of the ppi premium since you have been mis-sold it.

The PPI 'used' was probably calculated by something called 'the rule of 78' which does charge more of the premium up front (on the basis that your loan is higher at the start than at the end so therefore the PPI premium should be higher).

If you post what your loan was for, over how long, after how many months you cancelled/ rescheduled it, and how much the insurance premium was per month, one of us can probably calculate how much premium you might be due.

Good luck.

R.

heavy_t

Right, in Aug 05 (original loan with PPI) FD paid in £16,000 to my account then deducted £3553.81 "loan protection" from this.

In Nov 06 when I restructured (without PPI) they paid IN 2404.05 "loan protection refund" plus 12,200 "loan capital"

then took OUT 14342.89 "loan repayment".

£3553.81 - £2404.05 = £1149.76 I could (should?) claim back?

By those calculations I've been paying £88.44 per month (13 months) which seems about right.

heavy_t

Sorry for the bump!

Does anyone think it's worth me pursuing this £1149? Are they likely to roll over and cough or fob me off?

Thanks

Tom