FirstPlus admit misselling but I was claiming. - please help.

dm67

Hi, Not sure if anyone can help with this as it's probably quite an unusual instance but here goes.

I took out a loan with firstplus in 2007 and it had frontloaded ppi that I was told i had to have to get the loan, even though I had pre-existing medical issues.

In 2010 I became unwell and made a claim, which was accepted, and has been paying out ever since (I was medically retired in jan 2011 with a small occupational pension).

In october 2012 I received a letter from firstplus saying that my ppi expired in 2 weeks so I'd have to make alternative arrangements to repay the loan.

At that point I rang and was told they had sold me a 5yr ppi on a 15 year loan and might have a case for misselling. I filled out the form they asked me to and a month later got a letter saying they would repay all my ppi, less my claims, leaving me a total of £888 after tax was deducted. new loan payments were calculated which are HIGHER than the ones without the extra 18000 loan on top of the original capital, none of which seems to have been repaid in 5 years!

My issue though, is that I was unaware it was a 5yr policy and it was paying out so while I'm unwell my payments were covered. i cannot afford the repayments with my now limited income and their admission of mis selling just makes things worse as they're saying I need to sort it out alone, as opposed to paying out for the term of the loan which is what i thought I bought.

Does anyone know what my next step should be as, with this being a secured loan, my home is now at risk.

Many thanks for any help.

Mark

dunstonh

I took out a loan with firstplus in 2007 and it had frontloaded ppi that I was told i had to have to get the loan, even though I had pre-existing medical issues.

In 2010 I became unwell and made a claim, which was accepted, and has been paying out ever since (I was medically retired in jan 2011 with a small occupational pension).

The fact you had a pre-existing condition is only an issue if the condition is severe enough to effectively invalidate the policy. The fact you have a successful claim on the policy means it was not severe enough and not an issue.

At that point I rang and was told they had sold me a 5yr ppi on a 15 year loan and might have a case for misselling.

For front loaded cases, that is a valid complaint reason.

I filled out the form they asked me to and a month later got a letter saying they would repay all my ppi, less my claims, leaving me a total of £888 after tax was deducted. new loan payments were calculated which are HIGHER than the ones without the extra 18000 loan on top of the original capital, none of which seems to have been repaid in 5 years!

Whilst they offered you may have been mis-sold you still have the choice to proceed or not. In some cases it can be better off if you don't complain as you end up better off because of the mis-sale. The complaint, if upheld and accepted by you, is to put you in the position you would have been had you not had the PPI.

The complaint does not reduce the balance of the loan because the money comes to you in your pocket. You could have paid the money back against the debt and that would have reduced the payments. However, as you made a claim on the policy, that means you only get a small amount in your hands (£888) and that probably wont make a lot of a difference.

Your next step is to see a debt counsellor and they can run through your options on repaying the debt. If you are aged over 55, then equity release may be an option to investigate. That would allow you to keep your home but the debt wouldnt need monthly payments and interest would be added to the debt and repaid on death from the sale of the house.

dm67

Unfortunately I'm 10 years shy of 55 and the house is in negative equity.

So are you saying that because they sold a policy with an inadequate insurance term (which I understand was made illegal in 2009), just paying back the cost, less what has been paid out, is what is deemed the right thing to do, rather than paying out or extending the policy for the further 10 years?

If so I guess I'm screwed.

That said, many thanks for your advice, and for taking time out to help people!

Mark

JuicyJesus

dm67 wrote: »

Unfortunately I'm 10 years shy of 55 and the house is in negative equity.

So are you saying that because they sold a policy with an inadequate insurance term (which I understand was made illegal in 2009), just paying back the cost, less what has been paid out, is what is deemed the right thing to do, rather than paying out or extending the policy for the further 10 years?

It's logical. They have to put you back in the position you would have been had the policy never existed - by claiming mis-sale, you're not claiming that it was inadequate or that it was a poor policy, you're saying it shouldn't have been done in the first place. As such they have simply refunded you the amount of the PPI premiums you have paid, less amounts they have already paid you.

Why this has increased the payments on the loan I haven't got the faintest clue though. £888 over 10 years shouldn't increase the payments by much, if at all. I would put in a complaint to FirstPlus about it, personally, since all things considered altering the payment amount seems odd.