Goodwill offer from natwest around half of what I was expecting

pebblespop

I paid out for ppi on a five year loan, the premium was £990 and the interest was at 14%.

The loan has been paid in full.

I rang natwest to file my complaint and they have sent me a letter offering a goodwill gesture of £820.

My reasons for being mis sold ppi were: I get paid in full if I am off sick, I have worked at the same place for 20 years and would have a good amount of redundancy and i felt under pressure to take out the insurance before I could get my loan

Is there anything I can do before ombudsman

manama

Did they give you a break down of how they got to that amount? If not call and ask them.

pebblespop

the letter says they are prepared to refund the insurance premiums and interest you have paid to date.

it then says in the breakdown:

Total refund of PPI Premium and associated interest paid to date £533.88

They have then added gross interest at statutory rate to make it up to £820.

I have the paperwork which shows the premium was £990 at 14% interest.

Think i need to give them a ring tomorrow to find out what is going on.

amersall

You should have sent a copy of the paperwork in when you did the claim.
What was the total ppi with interest? i am curious as to why they have offered you a goodwill gesture and not full redress, did you settle the loan early? if you did then they will have given you a rebate on the ppi so they take this off the redress they give you, this will mean that you paid less ppi than you thought.

Is it possible this is not the loan you claimed for and could be another account they have found? you will need to ask them.

pebblespop

i sent in the questionaire from this website and a copy of the paperwork i had. after waiting 12 weeks i chased them up and they hadn't recieved it so i did a claim over the phone.

maybe this is something different, i think i will ring them tomorrow and find out what is going on.

dunstonh

I have the paperwork which shows the premium was £990 at 14% interest.

The defined redress method the the FOS also follow is the refund of any premiums paid plus 8% interest.

maybe this is something different, i think i will ring them tomorrow and find out what is going on.

It looks like you have got what you should and the method you complain is irrelevant to that. You have taken the premium and added 14%. They have taken the premium and added 8%

pebblespop

but my premium was £990 and that was charged at 14%.

the letter says they will repay the premium and interest i have paid.

should i not expect the 14% interest i have paid?

even if they add 8% i would be expecting more than the £820 they have offered.

ALIBOBSY

They way they do the calculation on a front loaded loan is based on the monthly payments NOT the total charged.
If you think when the loan starts to be paid you make a payment calculated to cover the capital AND the 14% interest. You should have been given a separate payment amount for the PPI portion and the main loan amount. The PPI payment will have been calculated to cover the capital for the PPI ie £990, plus the 14% interest. Therefore on a front loaded loan the payments themselves already include the interest payments. The FOS guidence is simple 8% interest on EACH payment not the total.

BUT given what they say about the breakdown, either they have made a mistake or more likely it was settled early.

NB I have assumed the £990 is the premium alone, not the total to pay which would include interest.

So the big question is was it settled early?

Ali x

magpiecottage

pebblespop wrote: »

My reasons for being mis sold ppi were: I get paid in full if I am off sick

Can you prove that - and if so for how long?

I have worked at the same place for 20 years and would have a good amount of redundancy

That is not a good reason because all redundancy payments are at the discretion of the employer

i felt under pressure to take out the insurance before I could get my loan

That is almost certainly not possible to prove.

So you need to bear in mind that if you go to FOS that constitutes a rejection of NatWest's offer which it is thus no longer obliged to honour.

It may decide that, since its commercial decision to try for a quick settlement has failed, it will fight and, if it wins, you will get nothing.

If it was a monthly premium (which may have added up to £990) then the likelihood is that it was correctly sold and, without seeing all the documents, I think they would be more likely than not to win.

If, on the other hand, you paid a single premium of £990 at outset and this was added to the loan then you should get back the £990, plus the interest charged (which would reduce in line with the loan) plus 8% simple on it.