PPI reclaim on loan passed to collection agency

charlie51

Hi,
My apologies first of all if this post is in wrong section/thread but as a newbie i'm hoping for forgiveness.

My friend has just heard back from santander that she can get just over £1000 back on her loan BUT because she defaulted due to ill health and personal issues the loan had been passed to a collection agency and santander have said that this money must be paid to them to reduce the amount owing.

As she is now disabled and struggling living on dla alone as her esa has been stopped (which is a whole other can of worms!) she was hoping to use some of this money to pay bills etc.

So, my question is, (sorry for waffling), can santander just send the money owing to the collection agency without her consent?

Thanks for any help you can give. :j

dunstonh

So, my question is, (sorry for waffling), can santander just send the money owing to the collection agency without her consent?

Yes. They are allows to use the redress against arrears, defaults and amounts written off.

If you think about it logically, she hasnt paid the debt which includes the PPI. So, why should she get a refund from it. If someone owed you money and had broken the terms of the repayment (i.e. gone bad) and then asked you to pay them some money back, would you?

charlie51

Thanks for your quick response, I did wonder if that was the case but said i'd find out for her.
At least they were quick responding, I'm still waiting to hear back from Lloyds TSB about my completed loan! I may be back!

dunstonh

Plus, its a bit less of the debt she has to repay. So its still good news.