8% simple interest question

misschicken

A credit card company has upheld my mis-sold PPI complaint. They are offering to pay back all premiums, interest and 8%. The PPI policy was taken out in 1999 and cancelled in 2009 and the credit card company says it only has to pay interest and 8% interest up until the date the policy was cancelled (over two years ago), not up to the date of settlement (now).

Are they right?

scottyedin

misschicken wrote: »

A credit card company has upheld my mis-sold PPI complaint. They are offering to pay back all premiums, interest and 8%. The PPI policy was taken out in 1999 and cancelled in 2009 and the credit card company says it only has to pay interest and 8% interest up until the date the policy was cancelled (over two years ago), not up to the date of settlement (now).

Are they right?

That doesn't sound correct at all. You have been deprived of this money so therefore the 8% statutory interest should be calculated up to date of settlement.

Thats my view on it anyway.

kelly993

I agree this does not sound correct. They should be paying you up until the present day, the idea is to return you back to the same financial position you were in before the PPI. I’m pretty sure that this is true, hopefully one of the calculations geniuses will be along soon to confirm this as they do lots of workings out for people and know exactly what should be included. Would you mind saying who the company is?

smitchy73

My interpretation would be that you should get the ppi payments, and card rate of interest charged back until the settlement, but then they should total it at that point when you settled your card and closed it, you should be getting your 8% from when it's been settled. The 8% during the time of your card being opened would normally only be awarded at the point your card goes into credit when they refund each of the months ppi charges for the term of your card.

misschicken

Thanks for the replies!

Smitchy - I don't understand the bit about the card being settled and closed, it's still active, only the PPI was cancelled in 2009.

smitchy73

misschicken wrote: »

Thanks for the replies!

Smitchy - I don't understand the bit about the card being settled and closed, it's still active, only the PPI was cancelled in 2009.

oops sorry mis-read(always doing that)

In that case I think they just adjust your account back to what it would have been if there had been no ppi charged to your account and refund those amounts to you, will be a tough one in regards to whether it's up to the point the ppi was cancelled or whether you get anything from that point till now.

You could also phone the FOS or FSA for some advice.

It is a very complicated way of working it out, you need the monthly transactions, monthly payment made, and the running balance, then what the ppi was, this then gives you a running balance of ppi, to this is added the compund interest(card rate)accrued each month, and this also tells you what is carried over and it's this amount which gives you a running ppi redress amount, then from all of this it can give you what the balance would have been if that hadn't been added, at these points if your account goes into credit(they owe you) then you get 8% simple interest added also as a seperate amount.
Hope this explains it a wee bit better, although still doesn't clear up if you should be getting interest from when the ppi ended.

magpiecottage

FOS will, if necessary force interest to the date of settlement (or no more than a month before).

misschicken

Thank you!

And to the previous poster who asked - it's MBNA.

They sent through upheld/settlement figures some weeks ago (premiums + interest + 8%). I have statements going quite a long way back, but am missing the very earliest ones so when I saw that the premiums totaled more than I had records for I presumed their figures were accurate - and probably are for the premiums anyway. When the refund cheque didn't arrive within the 28 days stated on their letter I wrote to them to chase it up and requested that they amend the interest element to bring it up to date of settlement. When I still had no response/cheque two weeks later I rang them only to be told that they had missed the 28 day deadline because they were very busy dealing with 'all the allegations' so it would be a couple more weeks yet and they weren't paying out the 8% at all anyway, only premiums and interest. The person I spoke to seemed very surprised I was having 8% added to my refund but then said that any interest being paid on refunds was only to the date the PPI was cancelled so there was nothing to amend anyway. I was told someone could contact me in writing about it but I probably wouldn't receive that letter until after I received the cheque. Then they decided they weren't able to discuss anything at all after that.

So I suppose I just wait and see what turns up now and take it from there.

magpiecottage

misschicken wrote: »

I rang them only to be told that they had missed the 28 day deadline because they were very busy dealing with 'all the allegations' so it would be a couple more weeks yet and they weren't paying out the 8% at all anyway, only premiums and interest. The person I spoke to seemed very surprised I was having 8% added to my refund but then said that any interest being paid on refunds was only to the date the PPI was cancelled so there was nothing to amend anyway. I was told someone could contact me in writing about it but I probably wouldn't receive that letter until after I received the cheque. Then they decided they weren't able to discuss anything at all after that.

Next time you call politely ask the monkey to let you speak to the organ grinder!