Ppi help-bank want to pay ppi to settled loan not me??

mr_boony

I put in a claim to nationwide for mid sold ppi which has been accepted. In the letter they said that any payment will go to the outstanding balance on the loan, which was settled 3 years ago!

I had the loan on a debt management plan and offered them a full and final settlement amount which they accepted and on my credit report it shows as settled. As I should never have paid the £215.84 in ppi in the first place it was mis sold is there any way of getting them to pay me not the loan? I have called them and they won't change it and I have lodged a complaint.

dunstonh

The lender is allowed to use the redress against a debt that was not paid in full.

The lender agrees to not chase you through the court but it does not mean the debt vanishes into thin air. They still suffer the loss. The rules allow them to use the redress against amounts written off, defaults or arrears in relation to that debt.

mr_boony

Thank u, do you know if it would ell my credit score by paying off some of a settled debt like this?

ALIBOBSY

No I believe Duns is wrong. The offset rules DO NOT allow them to hold the money against anything BUT a loan/debt still held with the original lender. Once its sold on to another company ie. debt collector that's it legally NOTHING is owed to the original lender and the rights of setoff cannot be used to pay the money to a third party.

The ombudsman recently agreed with us on a PPI claim for my OH where the company wanted to offset against a debt that had been sold onto a debt collector and settled by a F & F a few years ago.


I would definitely challenge this-send a copy of their written confirmation of the F & F-I assume this is them making an offer directly to you, not through the ombudsman?

BUT remember if they still refuse you will then need to take the matter to the ombudsman, which delays things by many months at a minimum-if the offset isn't a huge amount and you need the cash, you may decide to let it go.

Hopefully if you do a written response to Nationwide-don't bother with calls where they will try to fob you off. Refuse their offer because of the offset and send a copy of the F & F agreement and ask if they won't accept this that they send a written "final response" so that you can refer the whole matter to the ombudsman, they will see you are serious and pay up.

You usually find they will try to get you to sign an acceptance of the offer that includes a line about them offsetting any loses etc. If they had a legal right to do this why would they need your agreement to it?

I found the consumer action group forum had more info on challenging the banks attempts to pursue offsets when they had no legal right to, one case with Barclays even went to court where the customer won.

Ali x

mr_boony

They didnt sell the debt unfortunately, I went to a debt management company who I paid instalments to then they dispersed it to creditors. I offered an amount to clear off all my debts to them, they divided that up between creditors and they all agreed to accept their portion and write off the debt. I'm guessing its not covered by the same ruling?

dunstonh

No I believe Duns is wrong. The offset rules DO NOT allow them to hold the money against anything BUT a loan/debt still held with the original lender. Once its sold on to another company ie. debt collector that's it legally NOTHING is owed to the original lender and the rights of setoff cannot be used to pay the money to a third party.

It depends on the relationship between the third party collection agency and the lender. Many people assume that just because a third party is involved that the debt has been sold on. Whilst that can happen, a more common scenario is that the bank employs the third party to act as collections for itself rather than using its own staff. Back in my banking days, we used to get the branch staff to do the collections work. We then changed to using an external collection agency but the debt wasnt sold on.

The ombudsman recently agreed with us on a PPI claim for my OH where the company wanted to offset against a debt that had been sold onto a debt collector and settled by a F & F a few years ago.

The ombudsman has also ruled the other way. I has also seen outcomes that ruled similar to your case as well. IIRC, it all comes down to the commercial arrangement that exists between lender and collection agency. Although I suspect an element of how strongly a lender wants to argue the case would come into it. Many don't even bother to follow up FOS enquiries and don't argue beyond a certain point. Others will give a breakdown of how much the debt was, how much was collected via the sale of the debt and what shortfall exists. With different adjudicators you may well get different decisions.

ALIBOBSY

Unless you hold a letter from the lender confirming they accepted £xx in "Full and Final settlement" unfortunately you will struggle to prove to the ombudsman your position and they may well side with the lender.

TBH the vital thing is that F&F agreement or if a debt has been sold on to a third party. Without that the lender will just say we accepted what the customer had at the time as a partial settlement and agreed not to pursue it any further, which then allows them to offset.

You may have thought it was an F&F (and it may well have been), but without written proof you are struggling.

Still may be worth a written complaint to the lender stating what happened and that you believe it was a payment in full and final settlement so they should pay the full amount over to you. They may assume you have the proof to take it further, or confirm the details with their records and settle.

Worse case is you end up having to accept the offset anyway-have they given any figures? At least if the settlement is higher than the leftover balance you should get the difference and yes they should update your credit file to show the account then being settled in full.

Good Luck

Ali x

ALIBOBSY

dunstonh wrote: »

It depends on the relationship between the third party collection agency and the lender. Many people assume that just because a third party is involved that the debt has been sold on. Whilst that can happen, a more common scenario is that the bank employs the third party to act as collections for itself rather than using its own staff. Back in my banking days, we used to get the branch staff to do the collections work. We then changed to using an external collection agency but the debt wasnt sold on.



The ombudsman has also ruled the other way. I has also seen outcomes that ruled similar to your case as well. IIRC, it all comes down to the commercial arrangement that exists between lender and collection agency. Although I suspect an element of how strongly a lender wants to argue the case would come into it. Many don't even bother to follow up FOS enquiries and don't argue beyond a certain point. Others will give a breakdown of how much the debt was, how much was collected via the sale of the debt and what shortfall exists. With different adjudicators you may well get different decisions.

I know what you are saying Duns, but you can usually tell if a debt collector is acting on "behalf of" the original lender or if its been sold on. They should send you letters confirming if/when it is sold, but I suppose often customers won't have kept these. They have trouble when they meet horders like us who keep everything for years.

I think in this case the problem is the lender never sold the matter on and unless the OP has proof the settlement he made was accepted as a F & F he is struggling.

Ali x

I assume the original lender could in fact buy back these debts and do the offset then, but this is hard work for them and opens all sorts of cans of tax and write off worms lol.