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anyone good with ppi redress calculations?

amersall
Posts: 17,037 Forumite


If anyone can help with this calculation for Kuffs1978,i will love you forever and i owe you one big time xx
Please bear with me with this, as it is 4 posts rolled into one!!.
The usual maths wizards seem to have deserted us !!.
I hope you all had a peaceful Xmas and a good start to the new year.
I don't know if anyone replied to my last post; things have been more than a little difficult over the last month or so, and sadly that includes the PPI rebate situation. I'll be totally honest and say that I'm completely exhausted from this process; the guy at the FOS who's dealing with my case may still be on holiday and Norton Finance have not followed the Ombudsman's instructions that my loan repayments should be recalculated, and subsequently GE Money are potentially just 14 days away from serving a default notice. However, could some kind soul please tell us if our understanding of the following part of the Ombudsman's ruling is correct.
The part we're having trouble understanding reads:
"Norton cannot require X to reduce the loan beyond that which would now have applied had the PPI not been sold"
Does this mean that regardless of how many times my sister has paid the monthly instalment of £261.15 (including PPI) when the monthly amount without PPI would have been £216.88, whatever excess she has paid over the last 4 years will just be disregarded, and only NOW can she expect the monthly instalments to be £216.88? Or does it mean that since 48 payments of at least £216.88 had been paid, the difference between that figure and the £25.63 in PPI each month would count towards paying off the outstanding balance? It is very upsetting that we cannot find anyone who will help us understand this, and GE keep phoning and demanding more money than is owed. The loan agreement clearly states that without PPI the interest wiould have amounted to £3,009.20, yet my sister has already paid £11,334, but Norton claim she still owes £3354.20. We really don't understand. Please help.
GE Money informed us several times in 2011 that when the PPi had been taken off, the loan would take less time to clear. Then in October 2011 we were informed that my sister's payments were completely upto date, and the outstanding balance was £3354.20. This was before the PPI was taken off and the FOS decision was passed. Yet Norton wrote to my sister after the FOS had ruled in her favour, and told her that the £3354.20 still remained as the outstanding balance after the PPI rebate. The original loan agreement stated that without the PPI the interest to be repaid over 60 months was £3,009.20 on top of the 10k loan, yet £3,637 in interest has already been repaid after 48 months of repayments. The interest is the real crux of the problem as if the loan had been sold without PPI, by my calculations that means that £3,009.20 interest should have cost £50.15 per month, with the 10k costing £166.66 in capital repayments. Yet because of the PPI the initial sum even before repayments commenced rose by nearly £500 rather than the £150.45 it should have, and interest each month started at £101.30 per month and didn't get anywhere near £51.00 until January 2011. I've checked every single one of my sister's payments to GE and having deducted the cost of PPI each month, she has repaid £11,334 already. But the interest on the account has increased the outstanding balance dramatically every month, which nobody appears to want to acknowledge.
The loan agreement dated 14th August 2007 reads as follows:
Loan £10,000
Interest £3,009.70
Interest rate: 10.89%
Loan period 60 months.
Yesterday it was confirmed by GE Money that the £3,009.70 interest over the 60 month period equated to £50.16 in interest per month. When added to the £166.66 monthly capital repayment (10,000 divided by 60 payments) this should have meant that my sister's repayments should have been £216.82 a month, which is roughly in line with the £216.88 I had been previously informed. This is all my sister should have repaid each month, an according to the Ombudsman's statement on the final decision that "X should be placed back in the position she would have been in had the PPI not been sold"
In October 2011 GE Money contacted us and informed us that my sister's monthly repayments were fully upto date, therefore indicating that since she had made her first repayment in October 2007, she had therefore made 48 repayments.
Now, if working on the premise that she had only been paying the £216.88 she should have without the PPI per month, by the same logic at the very least she had therefore made 48 repayments of £216.88, which amounts to £10,410.24, which is only £2,599.46 short of the £13,009.70 the Ombudsman has agreed she repay (as that is all she would have been expected to repay if she hadn't bought the PPI).
That was my first indication that the outstanding figure of £3354.20 is wrong.
The second indication that it was wrong is that we sat down and over the course of two nights went through every bank statement and the actual statements from GE Money themselves, noting every payment that was made to the loan account since the loan was issued in August of that year. I then deducted the cost of every PPI premium paid (£1537.50 divided by 60=£25.63) until it's cancellation in April 2011, and then added all the totals paid for each calendar year together. They totalled £11,334, which if divided by payments of £216.88 means that my sister has made 52.25 repayments, and is therefore only £1,680.82 short of repaying the contractual £13,009.70.
However, because of the PPI being added, additional interest was charged on the account, and instead of an annual £601.92 in interest being charged, the actual interest has been quite shocking. These were:
Before repayment period commenced: £148.23
2007: £292.01
2008: £1082.21
2009: £988.57
2010: £742.23
2011: £403.98
Total interest accrued Aug 2007-Nov 2011: £3,657.23
You will no doubt notice that the annual interest was quite different in the years previous to 2011 when the PPI was cancelled, and I firmly believe that the interest charged on the account is the problem. If she had just been charged the annual £601.92 which the FOS have agreed should have been the case, at £216.88 a month, she would have repaid £10,410.24 of the loan, and £2,407.68 in interest by November 2011. But her payment history shows she has repaid £11,334.20 in repayments, whilst being charged (and surely that means she's paid?) £3,657.23 in interest over the same period. With such large amounts having already been repaid, how can Norton (and GE Money) justify their claim that she still has £3354.20 yet to pay?
The loan was sold at 10.8% in 2007 and has never been more than its current rate of 10.89% Including PPI the repayments started at 246.62, then rose to £252.84 in Jan 2008, where it remained until 2009, then rose again to £261.15 where it has remained since. The only reason the annual interest charged has been slightly different is because during the months when her finances would allow, my sister has made excess payments (January 2009 she paid £661.16 alone, for example, whilst she also paid £700 during August of that same year). The bottom line is that she has paid at least 48 payments of £216.88 so far, so why should she pay more than she would have without the wretched PPI?
Please bear with me with this, as it is 4 posts rolled into one!!.
The usual maths wizards seem to have deserted us !!.
I hope you all had a peaceful Xmas and a good start to the new year.
I don't know if anyone replied to my last post; things have been more than a little difficult over the last month or so, and sadly that includes the PPI rebate situation. I'll be totally honest and say that I'm completely exhausted from this process; the guy at the FOS who's dealing with my case may still be on holiday and Norton Finance have not followed the Ombudsman's instructions that my loan repayments should be recalculated, and subsequently GE Money are potentially just 14 days away from serving a default notice. However, could some kind soul please tell us if our understanding of the following part of the Ombudsman's ruling is correct.
The part we're having trouble understanding reads:
"Norton cannot require X to reduce the loan beyond that which would now have applied had the PPI not been sold"
Does this mean that regardless of how many times my sister has paid the monthly instalment of £261.15 (including PPI) when the monthly amount without PPI would have been £216.88, whatever excess she has paid over the last 4 years will just be disregarded, and only NOW can she expect the monthly instalments to be £216.88? Or does it mean that since 48 payments of at least £216.88 had been paid, the difference between that figure and the £25.63 in PPI each month would count towards paying off the outstanding balance? It is very upsetting that we cannot find anyone who will help us understand this, and GE keep phoning and demanding more money than is owed. The loan agreement clearly states that without PPI the interest wiould have amounted to £3,009.20, yet my sister has already paid £11,334, but Norton claim she still owes £3354.20. We really don't understand. Please help.
GE Money informed us several times in 2011 that when the PPi had been taken off, the loan would take less time to clear. Then in October 2011 we were informed that my sister's payments were completely upto date, and the outstanding balance was £3354.20. This was before the PPI was taken off and the FOS decision was passed. Yet Norton wrote to my sister after the FOS had ruled in her favour, and told her that the £3354.20 still remained as the outstanding balance after the PPI rebate. The original loan agreement stated that without the PPI the interest to be repaid over 60 months was £3,009.20 on top of the 10k loan, yet £3,637 in interest has already been repaid after 48 months of repayments. The interest is the real crux of the problem as if the loan had been sold without PPI, by my calculations that means that £3,009.20 interest should have cost £50.15 per month, with the 10k costing £166.66 in capital repayments. Yet because of the PPI the initial sum even before repayments commenced rose by nearly £500 rather than the £150.45 it should have, and interest each month started at £101.30 per month and didn't get anywhere near £51.00 until January 2011. I've checked every single one of my sister's payments to GE and having deducted the cost of PPI each month, she has repaid £11,334 already. But the interest on the account has increased the outstanding balance dramatically every month, which nobody appears to want to acknowledge.
The loan agreement dated 14th August 2007 reads as follows:
Loan £10,000
Interest £3,009.70
Interest rate: 10.89%
Loan period 60 months.
Yesterday it was confirmed by GE Money that the £3,009.70 interest over the 60 month period equated to £50.16 in interest per month. When added to the £166.66 monthly capital repayment (10,000 divided by 60 payments) this should have meant that my sister's repayments should have been £216.82 a month, which is roughly in line with the £216.88 I had been previously informed. This is all my sister should have repaid each month, an according to the Ombudsman's statement on the final decision that "X should be placed back in the position she would have been in had the PPI not been sold"
In October 2011 GE Money contacted us and informed us that my sister's monthly repayments were fully upto date, therefore indicating that since she had made her first repayment in October 2007, she had therefore made 48 repayments.
Now, if working on the premise that she had only been paying the £216.88 she should have without the PPI per month, by the same logic at the very least she had therefore made 48 repayments of £216.88, which amounts to £10,410.24, which is only £2,599.46 short of the £13,009.70 the Ombudsman has agreed she repay (as that is all she would have been expected to repay if she hadn't bought the PPI).
That was my first indication that the outstanding figure of £3354.20 is wrong.
The second indication that it was wrong is that we sat down and over the course of two nights went through every bank statement and the actual statements from GE Money themselves, noting every payment that was made to the loan account since the loan was issued in August of that year. I then deducted the cost of every PPI premium paid (£1537.50 divided by 60=£25.63) until it's cancellation in April 2011, and then added all the totals paid for each calendar year together. They totalled £11,334, which if divided by payments of £216.88 means that my sister has made 52.25 repayments, and is therefore only £1,680.82 short of repaying the contractual £13,009.70.
However, because of the PPI being added, additional interest was charged on the account, and instead of an annual £601.92 in interest being charged, the actual interest has been quite shocking. These were:
Before repayment period commenced: £148.23
2007: £292.01
2008: £1082.21
2009: £988.57
2010: £742.23
2011: £403.98
Total interest accrued Aug 2007-Nov 2011: £3,657.23
You will no doubt notice that the annual interest was quite different in the years previous to 2011 when the PPI was cancelled, and I firmly believe that the interest charged on the account is the problem. If she had just been charged the annual £601.92 which the FOS have agreed should have been the case, at £216.88 a month, she would have repaid £10,410.24 of the loan, and £2,407.68 in interest by November 2011. But her payment history shows she has repaid £11,334.20 in repayments, whilst being charged (and surely that means she's paid?) £3,657.23 in interest over the same period. With such large amounts having already been repaid, how can Norton (and GE Money) justify their claim that she still has £3354.20 yet to pay?
The loan was sold at 10.8% in 2007 and has never been more than its current rate of 10.89% Including PPI the repayments started at 246.62, then rose to £252.84 in Jan 2008, where it remained until 2009, then rose again to £261.15 where it has remained since. The only reason the annual interest charged has been slightly different is because during the months when her finances would allow, my sister has made excess payments (January 2009 she paid £661.16 alone, for example, whilst she also paid £700 during August of that same year). The bottom line is that she has paid at least 48 payments of £216.88 so far, so why should she pay more than she would have without the wretched PPI?
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Comments
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I have been reading kuffs posts over and over and I can't see how they can justify what they say is still outstanding?
It definitely needs someone with more mental arithmetic skills than I. Really wish I could help as I know you have been trying in vain to get kuffs an answer but it's beyond me, sorrySuccesses
Sainsbury's/BOS £6,400 Paid
MBNA £3,600 Paid0 -
My understanding of the ombudsman ruling is that Norton have to get GE money to restructure the locan to a point as though the PPI was not on and then they (nortons or the insurance company concerned) will have to refund the premiums paid plus 8% as per the FOS guidence. Now they could try to argue this would be held against the balance, but offset rules contradict this so you friend could argue the point. Mind you they might just be happy to have the loan reduced/cleared.
I think it is Norton they need to contact and chase up as they don't seem to have been in touch with ge money.
Ali x
Had another thought-it may be norton and GE are argueing over who has to stump up the money. Maybe GE are arguing that they can still pursue the full amount, but that nortons will have to refund all the difference or they want nortons to stump up money to compensate them for the loss in future interest.
Best bet is not to miss any payments until they sort things out (the money will come back eventually), and GE will keep pursing the original amount until they finalise things with nortons. Just because the ombudsman found in you favour, does not mean things are settled straight away, all these financial instituations drag their feet"Overthinking every little thing
Acknowledge the bell you cant unring"0 -
Hi there,
Thanks for your thoughts. What I don't understand is how Norton can be allowed to drag their feet and take so long in carrying out the Ombudsman's instructions. I mean, the Ombudsman ruled in my sister's favour back in October (I think the decision was actually passed on the 30th of September) and we're now half way through January and it still hasn't been resolved. As I've said so many times before, my sister is disabled so she doesn't have a lot of money. She has saved some money for some private medical treatment which she desperately needs, but if she has to use this money to cater to GE Money's demands she will have to endure at least another six months of agony until she can save enough to pay for her medical costs. This situation stinks and I am seriously considering getting my solicitor involved and taking legal action against Norton as surely this counts as a breach of contract?0 -
Had another thought-it may be norton and GE are argueing over who has to stump up the money. Maybe GE are arguing that they can still pursue the full amount, but that nortons will have to refund all the difference or they want nortons to stump up money to compensate them for the loss in future interest.
You could have this spot on,it could be the case of neither wants to give this cash.
Hopefully for kuffs this is was has happened and the FOS will clear this up.0 -
Thanks for your thoughts. What I don't understand is how Norton can be allowed to drag their feet and take so long in carrying out the Ombudsman's instructions. I mean, the Ombudsman ruled in my sister's favour back in October (I think the decision was actually passed on the 30th of September) and we're now half way through January and it still hasn't been resolved.
This needs to be dealt with ASAP,keep on at the guy at FOS dont give him any lee way on this,put a complaint into FOS regarding the way they are ..not...dealing with this,this may get it escalated.
Do not consider a solicitor at this point.see what can be done for free first,your sis does not want a legal bill to pay after saving money on a mis sell win.0 -
This needs to be dealt with ASAP,keep on at the guy at FOS dont give him any lee way on this.
Do not consider a solicitor at this point.see what can be done for free first,your sis does not want a legal bill to pay after saving money on a mis sell win.
I'm currently drafting a letter to the Managing Director of Norton as we speak. Would you believe that he had the audacity to tell us recently that we had got the wrong impression of the Ombudsman's instructions!? I thought they were pretty clear but what do I know?0 -
Another thought Kuffs,i dont think the ppi has been taken off the loan,that is the only thing i can think of that makes sense,with Ge money and Norton passing the buck,the ppi is still on there,i would put money on it.
Unless you have a statement that shows the ppi whole amount taken off?.0 -
Did the OP's sister receive a full rebate of the PPI policy in cash following her claim as it is not clear from the info provided ?Its amazing how these banks can't even do simple calculations correctly..............0
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Did the OP's sister receive a full rebate of the PPI policy in cash following her claim as it is not clear from the info provided ?
No, we haven't seen penny of it yet. The policy as cancelled in April of 2011 and a rebate of £384 was taken off the outstanding balance. Yet that £384 doesn't correspond with with the figures we have been given 'on paper' relating to the overall rebate of the PPI premiums paid up until that date (42 months, if my maths is correct) Don't get me wrong; £1826 would allow us to a number of important things which would make life much easier for my sister. But since her loan agreement says that she should only have paid £3,009.70 in interest over a 5 year period; the Ombudsman has agreed that this is all she should repay, yet even though GE Money have informed us that her current repayments total £12,534.20, which even if we were to be generous and deduct the full £1537.50 in PPI, that still leaves a repaid balance of just under £11,000 which is only £2,009.70 short of the full £13,009.70. Norton still claim she owes a further £3354.20 and have not followed the Ombudman's instructions to recalculate the loan repayments made so far, as well as recalculating and providing a breakdown of any outstanding balance repayable over the final 12 months of the loan period.
What baffles me is why, if the £1537.50 in PPI was divided over 60 months that equals £25.63. The £10,000 loan +the £3,009.70 interest divided over the same period equals £216.83. Yet when these two figures are added together, that equals £242.46. That's fine, except when the total sum repaid so far is £12,534.20 and that is divided by 60 that equals a monthly sum of £261.12 which is just three pence short of what my sister has been paying for the duration. So what happens to the 60 excess payments of £18.66 (total £1,119.60) she has also paid? And why was she asked to pay this excess per month, or more importantly, why was she penalised during the occasional month where she could only afford £250 (which is more than what the loan repayment should have been, and the additional PPI premium)?0 -
I think you are getting too bogged down in the numbers and the issues over interest etc and need to concentrate more on the basic facts. Ok, having digested all of this and thought about it, this is my take on the situation...
1. Your sister was sold the loan by Norton Finance acting as brokers.
2. The loan itself was provided by GE Money.
3. The PPI policy was therefore also sold by Norton Finance.
4. Again, GE Money provided the capital to pay the PPI single premium.
5. The FOS have now ruled against Norton Finance on the sale of the PPI.
6. Under FOS rules, as it was not GE Money who sold the PPI then they have no obligation to restructure the loan, as they simply provided the overall sum to Norton Finance who then arranged the policy on your behalf.
7. It is Norton Finance who need to do one of two things as the seller of the policy - they need to either.....
i) Repay your sister all the costs of the PPI, or
ii) Pay the whole cost of the PPI to GE Money who will then restructure the loan
You need to concentrate on Norton Finance here, and not muddy the waters by bringing GE Money into the equation. GE Money were simply providers of capital, they did not sell the loan or the PPI policy, and as such can not be expected to lose out. Norton Finance either need to reimburse your sister or repay the PPI element back to GE Money on her behalf. If they do the former then the loan will remain as it is, if they do the latter then the loan will be restructured. Either way, it is Norton Finance who need to pay out - whether that is directly to your sister or to GE Money on her behalf is the only issue really. But you are wasting your time chasing GE Money as they are doing nothing wrong - they lent out a sum of money and expect to be repaid it, it matters not to them if it is your sister or Norton Finance who pay it so long as somebody does.
My advice would be to concentrate on Norton Finance and, having now got a FOS ruling in your favour against them, inform them that if they do not do one of the two options as above then you will be issuing a county court claim against them for the whole amount. You are guaranteed to win in the county court as the FOS have already ruled that the PPI was missold by them and hopefully that will spark them into action to avoid having to pay legal costs as well.Its amazing how these banks can't even do simple calculations correctly..............0
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