PPI query - settling your loan early does PPI still apply?

sheridan80

I purchased a sofa with DFS back in Feb 2010 and had originally agreed a 2 year finance deal. However I paid the finance for the sofa off early in July 2010.

I have received a letter from Santander requesting £80 in unpaid PPI since July 2010.

Firstly I am disputing the fact that i agreed to pay PPI but aside from this surely the PPI should stop once the finance was paid in July 2010 and why should you be expected to keep paying for something whenh it is not required.

I contacted Santander and they advised me that when you sign up to pay PPI they pay the full amount (PPI over 48 months) to the insurance company in one lump sum. They then take the monthly PPI payment from the customer to reimburse the lump sum they paid at the beginning of the finance.

I am challenging this also.

Has anyone else came across this and can you shed any light on whether this is allowed?

Apologies if this question has already been answered before.

Thanks

J_i_m

I think the best bit of advice here is to look through the original agreements if you don't have them send a SARS. The PPI details should be on that and describe if it was single premium or not.

Though like you.. I would have thought settling the loan early would have automatically canceled the insurance but it seems it did not.

I'd make a complaint against miss sale anyway since you didn't agree to having PPI in the first place.

dunstonh

contacted Santander and they advised me that when you sign up to pay PPI they pay the full amount (PPI over 48 months) to the insurance company in one lump sum. They then take the monthly PPI payment from the customer to reimburse the lump sum they paid at the beginning of the finance.

As long as they are not charging interest on it then that is ok. It also makes sense with buy now pay later plans and small premiums.

Early settlements do create a refund on a relatively pro-rata basis.

Firstly I am disputing the fact that i agreed to pay PPI

not a problem. Ask them to refer to the application and where you agreed it or not. You signature will be on that form as well as the option to select it (or not).