Front loaded ppi ..questions as to what to write in claim letter

FabuLass

Hi, Im a bit confused so if you dont mind I'd like to put it all down here and ask advice as to what is relevant to my claim and what is best missed out? Thanks.

My husband and I changed mortgage lenders to Lloyds tsb (face to face meeting in branch) in Sept 2007, he was employed, myself housewife then self employed a few months later.

We had plenty equity so added in a few debts, but also wanted money for windows and a new car....still had £40,000 equity left between new mortgage and valuation but we were advised we wouldnt be able to add any more to mortgage as my husbands wages weren't enough, but instead my husband should take out a buy now pay later loan for £8,000 over 84mths pay it for 3 years then come back and see them and have it added into our mortgage at that point, which I cant remember why, but we didnt do that.

The BNPL loan was £8,000 and Loan protection ( I wasnt aware we had this til my statement arrived today...Im actually waiting for SAR from TSB) costing £2,933.56 with an interest rate of 14.88% per annum, which on yearly statement says...."this rate has been applied throughout the period of this statement to the whole outstanding balance"

Fast forward to March this year, we went into a DAS, this is our biggest debt. We had paid £218 pm up til November 2011, then first Das payment of £72.71pm from April to date.

So am I right in thinking this is whats called front loaded? The advisor knew we would pay 84 months of insurance upfront even as she was telling us to get rid of it in 3 years? And although we didnt do that....the Das arrangement is for the full amount we had outstanding (which is sitting at £7047 today) so clearly my husband is paying PPI which we couldn't claim if he became unemployed.

Im very unclear therefore as to what is relevant to add into my claim letter (eg. I know we couldnt say we were told to amortize loan and ppi into our mortgage as I doubt this was written down) and if anyone could advise me (in simple laymans terms as Im not very clued up), Id be truly grateful.

Thank you for reading...oh my head hurts....
yours confused....not so 'fabu' lass

amersall

This is indeed Single Premium PPI, the reasons for mis sell are, this PPI was added to the loan and repaid over the term with interest, this was in fact a loan on the loan, the full cost and unfair rebates of this PPI were not fully explained to you at the point of sale to make an informed decision, had the true cost of this PPI been explained fully you would not have taken it.

If the PPI could not have been claimed on when hubby became self employed is irrelevant, he should have notified them when this happened, it won't hurt to say what the loan was and that it would be paid in 3 years but the PPI with interest was over the full term of the Mortgage, enclose a copy of the statement showing this.

FabuLass

Hi Amersall, thank you for clarifying things for me....apologies about this bit....

amersall wrote: »

If the PPI could not have been claimed on when hubby became self employed is irrelevant.

It was me who was self-emploed, I dont know why I added this in...well prob to explain why it was just husbands wages used to calculate mortgage.

Can I ask what you mean when you say, " it wont hurt to say what loan was"

Also does anyone know should I fill out the ppi consumer questionaire and send it to Lloyds TSB or should I be writing a letter? Aaaand should I say what I would like refunded to me? Full amount of PPI? Including the 14.88% interest, plus 8%? Sorry I know I'm being dim

magpiecottage

amersall wrote: »

This is indeed Single Premium PPI, the reasons for mis sell are, this PPI was added to the loan and repaid over the term with interest, this was in fact a loan on the loan, the full cost and unfair rebates of this PPI were not fully explained to you at the point of sale to make an informed decision, had the true cost of this PPI been explained fully you would not have taken it.

Except that we do not know if a fair rebate would have applied or not.

it won't hurt to say what the loan was and that it would be paid in 3 years but the PPI with interest was over the full term of the Mortgage, enclose a copy of the statement showing this.

It will hurt if, as seems likely, the PPI loan was also supposed to be over 3 years.

FabuLass

Thank you also Magpiecottage, but Im unsure what you mean?

I dont know if I was unclear in my original post but we took the loan over 84 months so it seems to me we were to pay £2933.56 ppi plus 14.88% per annum which was front loaded on top of the actual loan. Do you think I have a claim?

-taff

fill out the questionnaire, no need to calculate what is owed

amersall

Except that we do not know if a fair rebate would have applied or not.

It will hurt if, as seems likely, the PPI loan was also supposed to be over 3 years.

Fair points, but the op is claiming that the PPI is over the term of the Mortgage, or have I read this wrong ?.

FabuLass

Sorry amersall, I think the way I worded it is confusing.

We took the loan out over 84 months. So basically we paid for 84 months of cover.

We were told we could apply for a larger mortgage in 3years to pay off loan if our income increased sufficiently, but we didnt apply to re-mortgage.

You will wonder then, why I mentioned the mortgage at all?......i wanted to let you know that the advisor was signing us up to pay 84months of ppi even when she knew after 36 months we may have re-mortgaged to pay the loan off.

-taff

FabuLass wrote: »

You will wonder then, why I mentioned the mortgage at all?......i wanted to let you know that the advisor was signing us up to pay 84months of ppi even when she knew after 36 months we may have re-mortgaged to pay the loan off.

'may be re-mortgaging' isn't the same as 'definitely will be re-mortgaging'.
You might want to check the ppi will actually have covered you for the full 84 months of the loan though, it's another missell reason.
It's front loaded/Single premium is you pay upfront for the loan to pay the PPI, which is then added to the original loan amount, and interest paid on it, all spread over the length of the loan. See first paragraph of second post.

magpiecottage

FabuLass wrote: »

We took the loan out over 84 months. So basically we paid for 84 months of cover.

We were told we could apply for a larger mortgage in 3years to pay off loan if our income increased sufficiently, but we didnt apply to re-mortgage.

You will wonder then, why I mentioned the mortgage at all?......i wanted to let you know that the advisor was signing us up to pay 84months of ppi even when she knew after 36 months we may have re-mortgaged to pay the loan off.

Oh - it would have been even worse if you had taken the remortgage as the premium for the PPI would have been added on to it.

As you didn't no (further) harm was done.

Simply complain that the single premium PPI was unsuitable. They may be able to argue a monthly premium policy was suitable but if you did not take PPI for the mortgage, which was a priority debt, that it seems unlikely you would knowingly have taken it for the unsecured loan. (Put simply, you could lose your home if you defaulted on the mortgage but not on an unsecured loan).