Sold debt court case / PPI claim - Please help!

marcanar

Hi all, have a question on a sold debt / PPI claim.

Friend took out a credit card (with MBNA) with 12k limit in 2004. Included PPI (which he believes was mis-sold).

He went into default on the account some time ago, and the debt was sold by MBNA to a debt company, who have been chasing him through the courts for it.

His argument is that because the PPI was originally mis-sold, the ~13k now owing should be covered by the PPI refund + interest / penalty rate. The debt company lawyers are saying the PPI was not mis-sold, and even if it were, the payout would not be enough to cover all the debt (they accept it would be reduced to around £3500 if it were mis-sold and then paid out according to THEIR calculations).

Three points:

1. The debt company have said the original application for the credit card was made online, and that there was no other contact between my friend and MBNA other than the signed documents he returned via post. (Their point being, if there was no personal contact between them, there could not be any "selling" of PPI and ergo, it could not be mis-sold).

However my friend can't even operate a computer and does all his banking on the phone, so he definitely didn't apply online. I had a look through the original application documents from MBNA that were submitted to court as evidence - and indeed, on the form with my friend's details (name/address/employment/etc) the box for "IP Address" is totally blank. Which I think proves his point that it was not an online application, ergo there WAS contact between him and the bank.

2. I'm a bit concerned the court might say "OK, maybe you have a case for mis-sale with MBNA, but you still currently owe this amount of money (~13k). The PPI claim might wipe some or all of that out, but it is a separate matter."

My friend points out that without the PPI and associated interest, there would not be a debt like this in the first place. I see this point, but am wondering how best to word it for the court submission we have to make soon. He wants to ask the court to have MBNA joined in the case as a third party, because his contract was not with the debt company but with MBNA. (So it's important to have MBNA joined in the case to stop judgement being given, until the outcome of the PPI claim is determined).

3. The debt company lawyers have suggested a figure for the PPI / interest in the theoretical event that it was mis-sold (but have NOT disclosed the calculations they did to achieve that figure, and how they calculated the interest). We know that there are multiple ways to calculate the interest on these claims. We've not done our own calculations yet, but obviously don't want to simply rely on theirs, which may not take into account compound interest and/or the 8% penalty rate I think is meant to be applied - or, at least, may not apply these things in the proper order.

Thanks so much for any and all assistance/advice on this. We're doing the court case on our own, so really appreciate any help with either the PPI element, or good suggestions on the legal side of things

Stupid_Question

Has your friend made a PPI complaint to MBNA that's been rejected due to him having bought the PPI online? If so, was it in the last 6 months?

meer53

If your friend makes a complaint about missold PPI to MBNA, they will calculate the amount to be repaid, if any. Without evidence of how much PPI was paid, there is no point in trying to do any calculations. It's all supposition.

It's highly unlikely that the PPI has caused your friend to owe such a high amount on their credit card. If they hadn't spent on the card, there would have been no PPI to pay.

If your friend does complain to MBNA about the PPI and they make an offer of repayment, depending on who now owns the debt, they may use the refund to offset what is owed. You need to wait until the claim is completed to find out.

[Deleted User]

marcanar wrote: »

My friend points out that without the PPI and associated interest, there would not be a debt like this in the first place.

I fail to see how you can defend a court case based on such supposition. Has MNBA actually agreed that the PPI was mis-sold? If not (and your friend hasn't actually complained) then a complaint to the Bank might be the best place to start.

If your defence hinges on the PPI being mis-sold and MBNA has admitted no such liability, it is difficult to see a court finding in your favour.

I'll also be surprised if the redress would cover the £13K debt.

marcanar

Stupid_Question wrote: »

Has your friend made a PPI complaint to MBNA that's been rejected due to him having bought the PPI online? If so, was it in the last 6 months?

Hi SQ - no he hasn't, he's made no claim on the PPI with MBNA at all.

meer53

So it's going to be pretty difficult to argue that the PPI was missold isn't it ?

Wouldn't it be better to get some legal advice ? You're right to be concerned, the court will say that your friend does owe this money, how can they say otherwise ?

You're flogging a dead horse trying to use PPI as a way to get out of it.

Stupid_Question

marcanar wrote: »

Hi SQ - no he hasn't, he's made no claim on the PPI with MBNA at all.

He should make a complaint to them then, the complaint is absolutely nothing to do with the debt purchaser. If they uphold it at least it'll lower the amount he owes under the inevitable CCJ.

If you've already been told that the policy purchase was done over the internet, and given that the premium was on every statement it's highly unlikely any complaint will be upheld. Especially considering the potential redress amount involved.

If indeed the policy wasn't bought online, what are your friends reasons for complaint?

Get some proper legal advice, be wary of legal advice given in forums.

[Deleted User]

Stupid_Question wrote: »

He should make a complaint to them then, the complaint is absolutely nothing to do with the debt purchaser. If they uphold it at least it'll lower the amount he owes under the inevitable CCJ.

My thoughts exactly. Why he hasn't already complained to the Bank I don't know...

Stupid_Question wrote: »

Get some proper legal advice, be wary of legal advice given in forums.

Good advice (over the internet;))

marcanar

Moneyineptitude wrote: »

If your defence hinges on the PPI being mis-sold and MBNA has admitted no such liability, it is difficult to see a court finding in your favour.

I'll also be surprised if the redress would cover the £13K debt.

Hi - those were my initial thoughts as well. However my friend contends the debt should not even exist in this form because the PPI was mis-sold - and had it not been, the debt would have looked quite different. Hence trying to join MBNA in the case as a third party: if they can be made to admit liability in court, the debt can be set-off.

The opposing lawyer seems to recognise this might be a problem, as he spends a lot of time in his witness statement trying to debunk the idea that it was mis-sold at all - but his points are based on a flawed premise: that the application was online and therefore there was no opportunity to mis-sell. In fact it was all done by an MBNA rep, by phone.

Also, I've looked at the PPI figures (they are helpfully all included in the evidence provided) and the amount of PPI debited each month from my friend's account is very high - between 40 and 80 pounds a month, with most months in the £70+ range. Also, the interest rate the debt company lawyers *appear* to have used for their 'theoretical refund' calculations is not (by my reading) 8% - which I believe is the rate the government set for PPI misselling. So add all that up over the better part of a decade and I think 13k might even be a conservative figure once the punitive interest rate + compound interest is factored in. Do you agree, or are we missing something here?

Thank you!

Stupid_Question

marcanar wrote: »

Hi - those were my initial thoughts as well. However my friend contends the debt should not even exist in this form because the PPI was mis-sold - and had it not been, the debt would have looked quite different. Hence trying to join MBNA in the case as a third party: if they can be made to admit liability in court, the debt can be set-off.

The opposing lawyer seems to recognise this might be a problem, as he spends a lot of time in his witness statement trying to debunk the idea that it was mis-sold at all - but his points are based on a flawed premise: that the application was online and therefore there was no opportunity to mis-sell. In fact it was all done by an MBNA rep, by phone.

Also, I've looked at the PPI figures (they are helpfully all included in the evidence provided) and the amount of PPI debited each month from my friend's account is very high - between 40 and 80 pounds a month, with most months in the £70+ range. Also, the interest rate the debt company lawyers *appear* to have used for their 'theoretical refund' calculations is not (by my reading) 8% - which I believe is the rate the government set for PPI misselling. So add all that up over the better part of a decade and I think 13k might even be a conservative figure once the punitive interest rate + compound interest is factored in. Do you agree, or are we missing something here?

Thank you!

What interest rate do their figures show? It should be 8% simple not compound.

The biggest stumbling block, asides from the internet sale issue, is that this premium appeared on every statement. If he was dissatisfied with it he had ample time to cancel it.

marcanar

Stupid_Question wrote: »

What interest rate do their figures show? It should be 8% simple not compound.

The biggest stumbling block, asides from the internet sale issue, is that this premium appeared on every statement. If he was dissatisfied with it he had ample time to cancel it.

Their figures just show a relative monthly rate, between 0% and 3.8%, with most around the 1.5% mark. Nowhere in the entire document do they mention the 8% p/a rate.

I hear you on the second point, although isn't that the case for most PPI claimants? IE, they've been mis-sold a product from the start that wasn't right for them, not that it's been concealed from them per se.