Sold debt court case / PPI claim - Please help!

-taff

he can make a complaint for misselling and see what happens.
Ths is how the FOS deal with redress in the case of credit cards.
http://www.financial-ombudsman.org.uk/publications/technical_notes/ppi/redress.html#_Redress_for_mis-sold_

The 8% interest would only apply to any amount the card would have been in credit, not to the PPI charged.

He will not receive the interest attached to the capital borrowed so forget about that. If his debt was that great, it'll be difficult to argue that the PPI caused the debt. His spending and not paying off in full every month caused the majoriy of the debt.

marcanar

Thanks for the link; it was clearer than the other literature I'd read on the same subject. There are a few months when the cumulative PPI payments (up through that month) exceed the month's balance on the card, so I am assuming those are the ones where 8% applies.

marcanar

One other important point: I would've thought that because there are lots of over-limit charges, and (towards the end) late default sums on the account, we can argue that without the cumulative PPI premiums the account would not have been over the limit (or in default).

Therefore, at the minimum, I would think that's an argument for striking any over-limit and default notice charges from the total amount owed. That's a lot of £££ right there. But we can also argue that he wouldn't be in court at all without those cumulative premiums (which add up to thousands of £££ by the end) constantly taking the balance up so high. IE - without the PPI, he may never have been in default on the card.

It seems (to me) to make the PPI issue much more relevant to the case/debt as a whole. Do you guys agree this is a good point to make?

Going to be writing the latest submission tomorrow, so any comment on this, or other random helpful thoughts, would be great. Thanks to everyone who already commented!

[Deleted User]

marcanar wrote: »

Thanks for the link; it was clearer than the other literature I'd read on the same subject. There are a few months when the cumulative PPI payments (up through that month) exceed the month's balance on the card, so I am assuming those are the ones where 8% applies.

The 8% figure is the additional interest paid by the Bank in the event the PPI is redressed according to FOS guidelines. It's nothing to do with interest paid at the time of running up the debt.
As -taff said above, it is your friend's spending (and failure to re-pay) that caused the debt. He could have cancelled the insurance at any time.


I think you're going to need a more robust defence than just working out how much redress the Bank would pay IF they agreed the PPI was mis-sold.
It's not the job of this court to adjudicate if the PPI was mis-sold, all they will be doing is giving your friend a County Court Judgement against his name.

marcanar

Hi Moneyineptitude, hmm so a couple of questions if you don't mind:

1. On the 8% interest - my understanding was this (for example): if in June 2005 the balance on my card is £2000 and to that point my total PPI payments (added up from the start) total £1000, no additional 8% interest would be paid for June. If in July 2005 I've paid off £1500 from the card, and then paid another £50 in PPI, the balance on my card is now £550 and my cumulative PPI payments are now £1050. I would therefore be entitled to redress at the rate of 8% simple p/a on £500 for July, as I'd otherwise have been £500 in credit without the PPI payments.

Could you please let me know if and where I've misunderstood? (Assume for the moment it's a valid claim, I just want to make sure I get my head around the system).

2. Separately, do you not think the point I made in my previous post is a good point to make (that without these extra charges and associated interest from the mis-sold PPI, my friend's account would not have defaulted in the first place?). Bear in mind that there was well over £6000 in PPI premiums debited over the course of the account, plus the associated interest, and then there's all the overlimit and default charges. The debt company can't answer this of course, but MBNA can. Hence my friend petitioning to add them as a third party.

Of course as you say, he could've cancelled the PPI on any given month, but that would not have erased the PPI sums and interest already accumulated (and continuing to accumulate every month) for a mis-sold product.

I feel the debt lawyer has gone into so much detail on his statement trying to debunk the idea that PPI was missold because he doesn't want the judge thinking there's a case here, and so staving off judgement. (And I think he's shot himself in the foot while doing so, because his debunking is based on what we can show is an incorrect premise - that there was no contact between my friend and the bank and so no opportunity to mis-sell - as the sale was done on the phone by an MBNA rep).

I agree some independent legal advice would be much better, however we're a bit pressed for time right now trying to get this done (and have no local CAB). Not treating anything here as legal advice, just help as we try to navigate this step by step

[Deleted User]

marcanar wrote: »

On the 8% interest - my understanding was this (for example): if in June 2005 the balance on my card is £2000 and to that point my total PPI payments (added up from the start) total £1000, no additional 8% interest would be paid for June. If in July 2005 I've paid off £1500 from the card, and then paid another £50 in PPI, the balance on my card is now £550 and my cumulative PPI payments are now £1050. I would therefore be entitled to redress at the rate of 8% simple p/a on £500 for July, as I'd otherwise have been £500 in credit without the PPI payments.

All of this is nonsensical, given that the Bank have not agreed the policy was mis-sold. Redress, if awarded, is simply a refund of all PPI
plus attendant interest, plus simple interest of 8%.

marcanar wrote: »

Separately, do you not think the point I made in my previous post is a good point to make (that without these extra charges and associated interest from the mis-sold PPI, my friend's account would not have defaulted in the first place?).

It would be valid to mention as a contributory factor in the debt running up so high, but only if the policy were shown to be mis-sold. You really need to be filing a PPI complaint with the Bank. If your friend wins redress from this then at least it should take some of the sting out of the inevitable CCJ he is on a collision course with.

marcanar wrote: »

and then there's all the overlimit and default charges.

These won't be refunded, that's your friend's fault alone.

marcanar wrote: »

I feel the debt lawyer has gone into so much detail on his statement trying to debunk the idea that PPI was missold

How do you propose to show the PPI was mis-sold? It might be different if the Bank had already agreed it was, but otherwise your argument falls flat.
I would expect the judge to reserve judgement until your friend has made a complaint to the Bank.

marcanar wrote: »

I agree some independent legal advice would be much better, however we're a bit pressed for time right now trying to get this done (and have no local CAB). Not treating anything here as legal advice, just help as we try to navigate this step by step

You've left it all far too late.

I doubt you'll get many more responses to this thread with the weekend and then Christmas just ahead.

DevCoder

Even if it was done by phone, how are you going to prove the PPI was mis-sold? He-said , she-said is not acceptable. What in your friends circumstances means the PPI would not pay out or can you prove that he did not agree to the PPI (even verbally)?

[Deleted User]

krisdorey wrote: »

Even if it was done by phone, how are you going to prove the PPI was mis-sold? He-said , she-said is not acceptable. What in your friends circumstances means the PPI would not pay out or can you prove that he did not agree to the PPI (even verbally)?

Exactly. The OP's friend has a weak mis-selling complaint to begin with.

Buzby

He's hoping for compound justice - which isn't going to happen - there is no right of 'set off' for a debt from another implied shortcoming. He may believe one cancels out the other, but it doesn't - and since the debt was fold on, which he will have agreed to, the PPI issue needs to follow its own separate track.

If he doesn't plan to pay, then he needs to find a different reason to reject - but it doesn't look good.

marcanar

Moneyineptitude wrote: »

All of this is nonsensical, given that the Bank have not agreed the policy was mis-sold. Redress, if awarded, is simply a refund of all PPI
plus attendant interest, plus simple interest of 8%.

Okay, so I've found the figures the debt company lawyers came up with here (although I have not yet checked their calculations), and they say:

There were ~£6,700 in PPI debits, attracting total interest of ~£1,200, over the course of the agreement. In addition, they say, there would be ~£1,900 interest due on the payments (credits) my friend made in respect of PPI over the course of the agreement.

Therefore, the lawyer says, if the PPI claim were upheld, the amount due would be reduced from ~£13,000 to ~£3,200.

However this does not seem to include the 8% simple interest? How should that be applied in this situation IF the bank ultimately accepts that PPI was missold? It seems like it would have a sizeable impact.

Moneyineptitude wrote: »

How do you propose to show the PPI was mis-sold? It might be different if the Bank had already agreed it was, but otherwise your argument falls flat.
I would expect the judge to reserve judgement until your friend has made a complaint to the Bank.

If the judge reserves judgement until the bank assesses the PPI claim, that is acceptable to us at this stage. Do you have any suggestions as to the best approach to take with the judge to achieve such an outcome (which is preferable for my friend than an immediate CCJ, whilst he sorts his other financial affairs out)?

I am grateful for all your helpful replies. I share many of the listed concerns with the case, and am going to see if we can get some independent advice soon, but am dealing with what I have right now.