PPI and setting off rules

goodfriday

I received a PPI reclaim from welcome finance in December for £3395.00, I had been in arrears of £800.00 with them, they took all the money and took it off the loan which I owe, I was hoping that they would take the £800.00 which I owed and thought they would send the difference to myself, so i would be able to pay other debts I have had e.g. mrtgage arrears off, can i request that I have been in financial hardship and for them to send the difference, or are they allowed to take it all to pay some of the loan?:eek:

[Deleted User]

goodfriday wrote: »

I was hoping that they would take the £800.00 which I owed and thought they would send the difference to myself, so i would be able to pay other debts I have had e.g. mrtgage arrears off, can i request that I have been in financial hardship and for them to send the difference, or are they allowed to take it all to pay some of the loan?:eek:

Sorry chum, they've taken it all for the money you owe them.
You really need to be reading and posting in this part of the forum:
http://forums.moneysavingexpert.com/forumdisplay.php?f=76
Loads of sound information and help there!

tifo

they should clear the £800 arrears and send you the remaining amount. They should send you all the interest as that cannot be set off.

magpiecottage

DISP App 3.9.1G says, "Where the complainant's loan or credit card is in arrears the firm may, if it has the contractual right to do so, make a payment to reduce the associated loan or credit card balance, if the complainant accepts the firm's offer of redress. The firm should act fairly and reasonably in deciding whether to make such a payment."

Strictly speaking, there is nothing in that which says they cannot reduce it beyond the level of arrears. Whether FOS would consider doing so to be fair and reasonable is debatable but I think there is an argument to say that since you have fallen into arrears it is reasonable that it wants to protect its position.

It also seems odd that the FSA would put it in those terms anyway since the right to set off against the arrears is already in other legislation.

dunstonh

It also seems odd that the FSA would put it in those terms anyway since the right to set off against the arrears is already in other legislation.

Possibly more for the benefit of consumers who may try and argue the case and like to quote rules or regs (often out of context). They cant argue with it if the position is stated clearly.

goodfriday

Thank you for all you help I will write to welcome finance complaints and see whether I get anywhere with them, I will post when I hear back from them