Front loaded PPI

hazelwell

Hello,
Firstly, thanks to all who take the time to post on here- it has been so helpful.
I am really confused by front loaded PPI, what it actually is and why is it usually upheld as a misselling reason.
I am currently reclaiming PPI on a number of loans, using the forms on here. My reasons were that it wasn't fully explained, didn't need it, and in some cases, was added automatically and I thought I had to have it.
After sending the forms and reading on here, I realised that all my loans appear to be front loaded, in that the loan and PPI were put together and taken as one payment.
One of the loans was taken out in 1992 with Alliance and Leicester and I sent my form in to Santander (I had a copy of the original loan agreement) a couple of weeks ago. They have written back within two weeks with a redress offer totalling £1800 !!
I think this is because it was front loaded and not for my other reasons, although they didn't say why they were upholding the complaint.
Could someone explain it all to me please

[Deleted User]

hazelwell wrote: »

all my loans appear to be front loaded, in that the loan and PPI were put together and taken as one payment.

You don't need it explaining to you, you've pretty much summed it up yourself!:)
The key mis-selling point with front loading is that it's not just the one payment of both, it's the extra interest which is incurred as the insurance policy and loan amounts are combined.
Clear now?

hazelwell

Thanks for your response, but how does it accrue extra interest? The loan and ppi were both worked out separately, with separate interest, and then added together as a monthly payment. Should only the loan have had interest on it?
Also, was it typical of the time 1990-2000, for loans to be set up like this, because all mine are the same.
It doesn't really matter- just curious!

[Deleted User]

hazelwell wrote: »

The loan and ppi were both worked out separately, with separate interest, and then added together as a monthly payment. Should only the loan have had interest on it?

By combining the loan for PPI with the loan itself extra interest was incurred.
This is just one of many mis-selling instances during the heyday of PPI.

hazelwell

I see! Double dipping by the bank!
This looks promising for my other claims then as they are also front loaded. I did wonder if the banks wouldn't uphold the complaint as I didn't mention it in my application, but Santander recognised the front load aspect, so hopefully the rest will.

[Deleted User]

hazelwell wrote: »

I see! Double dipping by the bank!

A very apt description.
A loan on a loan to term end with interest.

Perhaps this thread needs to be a "sticky"? it's already been linked to by another poster...

andytom_2

hi,i have made a ppi claim to Halifax but they knocked me back on the basis i took the loan out over the internet and i had ticked the ppi box,so therefore was not missold,anyway in reading some posts on this forum i came across frontloading,so can anyone tell me if this policy is frontloaded, amount of credit(the cash loan) 5,000 ,amount of credit(the insurance loan)1,003.63 ,total amount of credit(the total loan)6,003.63 ,duration of agreement 36 months ,total amount you pay for cash loan 6007.68, total amount you pay for insurance loan 1,213.68 ,total amount you pay for the total loan 7,213.68 ,amount of monthly payments 200.38 ,we will divide your monthly payments between the cash loan and the insurance loan in the same proportion as they bear to the total loan, do i have cause for complaint or should i let it go????.

amersall

This is front loaded PPI, put the claim in.

Lyz_Fox

Sorry as again this probably very obvious to those of you who understand these things but could someone confirm if this is a front loaded PPI as I am getting myself very confused by it all
Cash loan Premium Loan
Amount Of loan £5,000 £1246.20
Total Credit Charge £2685.40 £669.00
Total Payable £7685.40 £1915.2
Monthly Payment £128.09 + £31.92 =160.01
No Of Repayments 60 60

I have copied this off the sheet so fingers crossed it makes sense but it was taken out back in 2004 so hopefully I am not too late, does this matter even if i have the original paperwork?

Thanks
Lyz

jay-1

Did you pay this PPI in with the monthly payment for the loan?

If you did, then this is Single Premium PPI(front loaded) and is the most upheld of all PPI reclaims.

You are not too late to put in a claim.