Don't think I'll be able to claim for LPI

mad_dr

Hi all,

I would appreciate your advice - I've read the FAQs and a number of threads about reclaiming charges for Loan Protection Insurance I took out from Lloyds in late July 2006. I suspect that I won't be eligible for claiming a refund on the charges I paid but would appreciate any thoughts/advice.

Not sure what information and facts to state so here are a few:

1. I took out the loan (I'll call this one 'second loan' in late July 2006 to consolidate an existing loan from Lloyds (I'll call that 'first loan'). I cannot recall the amount still outstanding in July 2006 from the 'first loan' or the starting first loan amount or the length of term of the first loan or how far through I was in July 2006. I don't think I have any paperwork for this original loan but DO have a single letter from early Aug 2006 whereby they acknowledged that I'd paid off the 'first loan' and that they had used what would have been a refund of £321.58 for 'loan insurance' to reduce the closing balance. I cannot recall what was discussed or what (if anything) I signed in relation to insurance for the 'first loan'.


2. In addition to consolidating the first loan, the second, loan was mainly to provide funds for a new computer with which I intended to try to earn some money. Not really a business loan as it was a hobby that I felt could earn some money from - in the end I didn't pursue this idea. I forget what I spent the loan on in the end.

3. I have quite a bit of paperwork for the second loan including a document detailing the amount of the second loan, with term length (48 months) and details of the loan amount, interest amount, Loan Protection Insurance amount (£2193) and LPI interest amount (£313 over the term of the loan) and the monthly costs for both combined (and individually).

4. I also have a carbon copy of a Personal Loan Checklist which is signed by an 'Authorised Lending Officer' and me. It has checkboxes marked to show things like that I have provided them information to enable them to make recommendations about LPI products.

5. I paid off the loan early in Nov 2008 and would guess that I received a refund of the surplus LPI but am not sure about this - I cannot find any paperwork around this.

6. I cannot recall either way, what (if any) conversations were held. Ie I don't know whether they actually breezed through the forms and just told me to sign them. My potential ignorance is no excuse but I never needed this insurance (I had been employed by my current employer for 7 years at that point and have had comprehensive cover from them (death in service, critical illness cover, 12 month full sick pay policy, etc) since starting work there.) I've been at this employer for 13 years now...

Overall, I honestly cannot remember what was discussed. I had completely forgotten about these two loans until uncovering the above documentation today in a massive sort-out. I don't want to claim falsely and my suspicion is that through my ignorance I've probably signed paperwork that states that I understand exactly what I purchased but it's £2500 for the LPI costs of the second loan and goodness knows how much for the first loan - neither of which I'd ever have claimed on.

Am I able to proceed given that I signed the LPI forms (as, I guess, did everyone else here?) and given that I can't remember any conversations?

Many thanks in advance for your help and advice!

[Deleted User]

mad_dr wrote: »

Am I able to proceed given that I signed the LPI forms (as, I guess, did everyone else here?) and given that I can't remember any conversations?

Many complainants do the opposite and detail exactly what was said at the point of sale regardless of how many years ago it was. However, such complaints are usually rejected on the basis of being "hearsay" which cannot be proven one way or the other.

What you need to be looking for is VERIFIABLE complaint reasons. For example, the most upheld complaint is that the PPI policy was "front loaded" into a single monthly premium to attract extra interest.
Does this apply to you?

Look here for other reasons:
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance#step2
but ignore the "he said, she said" allegations.

Good luck

mad_dr

Thanks for replying so quickly!

I'm definitely keen to stick to the facts but I just can't recall all of them. Seems unwise to claim if I don't know the facts but it seems equally wrong for them to get away with potentially having missold the LPI (on the basis that I didn't need or ask for it) just because I can't recall the conversations.

I realise though that, at the time, as a somewhat naive 23 year old I was responsible for my decisions and the agreements I signed up to, regardless of whether I understood or remember them so I'm keen to do things by the book.

The LPI (on the second loan at least) was definitely calculated (presumably as a percentage of the pre-interest loan amount) and either split into a monthly cost or just applied to each month of the term:

My letters in parentheses, by the way.

Loan amount: £12,261.24 (a)
Monthly repayment: £291.85 (c)
Number of repayments: 48
Total amount payable: £14,008.80 (e)
APR: 6.9%

LPI loan amount: £2,193.67 (b)
Monthly repayment: £52.22 (d)
Number of repayments : 48
Total amount payable: 2,506.56 (f)
APR: 6.9%

Total loan: £14,454.91 (a + b)
Monthly repayment: £344.07 (c +d)
Number of repayments: 48
Total amount payable: £16,515.36 (e + f)

Does this sound like it's front-loaded? I can't tell from the paperwork (and my Maths doesn't let me calculate) whether they took into account the fact that for example, after 3 years of the 4 year term, their risk would only be 25% of what it was at the outset... Ie after 3 years, I would have paid back 75% of the balance so their potential exposure would have been much lower than 3 years previously.

Many thanks again!

[Deleted User]

mad_dr wrote: »

Total loan: £14,454.91
Monthly repayment: £344.07
Number of repayments: 48
Does this sound like it's front-loaded?

If the £344.07 was paid as a single monthly premium (rather than split into two separate ones for loan and insurance) then it definitely was front loaded.
You may need to look at a statement to be sure.

mad_dr

Just checked my bank statements and the payments were definitely in a single lump each month for £344.07.

[Deleted User]

mad_dr wrote: »

Just checked my bank statements and the payments were definitely in a single lump each month for £344.07.

So you complain on the basis that this was single premium front-loaded PPI.
This is the most upheld complaint reason at FOS.
Good luck...

mad_dr

Excellent! Thanks for the advice and for being able to provide a good pointer as to what factor I ought to complain about. I'll go back through the checklist, etc and do things as per the recommended process, along with your suggestion about the front loaded single policy factor.

Is there any benefit or drawback in me mentioning the fact that, given the cover through my work, I didn't need the LPI in the first place?

I also found a document relating to this loan titled 'Your Personal Summary & Our Recommendation(s)'

Under the section titled 'Details of our product recommendation' it says (amongst other things): Although you have existing insurance, savings or other means which you could use to cover your monthly loan repayments in the event of your unemployment, you do not wish to use them for this purpose. I definitely don't see myself saying that... Notably, this document does not have a signature from me - only them.

Thanks again!

[Deleted User]

mad_dr wrote: »

I'll go back through the checklist, etc and do things as per the recommended process, along with your suggestion about the front loaded single policy factor.

Don't be following that checklist too laboriously. The single premium (not "policy") is what you need to emphasise. All other concerns are secondary.

mad_dr

Thank you. Sorry to ask so many questions but as these claims seem to be quite a lengthy process, I'd like to do it right. So....

Is the Front loaded single premium an inherently bad thing/mis-sale in itself? I guess I'm trying to work out what my approach/wording is going to be in the letter that I write to them.

If I know that the single premium thing is universally known amongst the banks to be grounds for an immediate refund then great. But if it's more a case of having to explain to them why I'm unhappy with the single premium thing, then I'll need to learn more about what it means, why it's commonly known to be a bad thing (according to the FOS) and therefore why I'm telling Lloyds that I'm unhappy about it.

Hope this makes sense and thanks again for your help!

[Deleted User]

mad_dr wrote: »

Is the Front loaded single premium an inherently bad thing/mis-sale in itself?

Yes, but obviously the better you familiarise yourself with the concept, the better you'll be able to word your complaint to the bank.

amersall

The Single Premium PPI full cost and unfair rebates of this PPI would not have been explained to you at the point of sale to make an informed decision, had you known the full facts of this PPI you would not have taken it.

Job done!.