ppi frontloading

grubsup

Hi im new to this so bear with me, I think my bank loan was front loaded where the insurance was added to the loan amount than intrest added on top. Ive already sent my letter complaining to them, but did not add this as one of the excuses , should i contact them and add this complaint on, and can someone kindly explain front loading just so i get it right many thanks.

dilus

grubsup wrote: »

Hi im new to this so bear with me, I think my bank loan was front loaded where the insurance was added to the loan amount than intrest added on top. Ive already sent my letter complaining to them, but did not add this as one of the excuses , should i contact them and add this complaint on, and can someone kindly explain front loading just so i get it right many thanks.

Hi grubsup,
Front loaded PPI was a big NO NO as far as the FOS are concerned. It was basically a loan within a loan, lumped on at the start of the loan so you paid interest on the whole amount for the duration of the loan. Some front loaded PPI policies only covered you for the first 5 years of the loan, so if your loan was over 7 years you carried on paying for it for two years despite not being covered. It is a widely upheld reason for mis sell and you should have mentioned it originally. If you want to write a covering letter with all your details and mention this fact too, do so. It was often very expensive compared to standalone insurance, had you been given the opportunity to shop around. It is very difficult for the banks to defend selling this and has been banned since April 2011.

magpiecottage

dilus wrote: »

Front loaded PPI was a big NO NO as far as the FOS are concerned.

Though not illegal.

Generally, though, to defend a complaint the lender must show that they made you aware both of the total cost, including interest, over the term of the loan and, where applicable, that it only ran for part of the term.

In reality this seldom happened.

There is no harm in writing and pointing this issue out. They should pick it up themselves but may not do. You do not need any particular wording, simply saying the premium was added to the loan should be enough.