PPI Question re Lloyds

salem2008

Hi there,

We have received a letter this week stating that we may of been mis-sold PPI by Lloyds TSB on a loan.

Having read the details in the letter, it would certainly seem so!

We have dug out some statements, from when we used to receive paper copies and at the top it states:

Loan Amount: £25,000
Loan Protection Insurance: £7,143.43 (OMG!!!!!)
Interest Rate: 9.51%
Loan duration: 84 months

The total loan amount which shows on our online bank account is £32, 143.43.

So, am I right in thinking that the LPI is PPI? ... and if so, this is what could potentially be owed to us?

We now have a balance of £3414.84 (payments monthly are £525.69).

*lies down in darkened room in shock*

Thanks in advance for any advice. xx

[Deleted User]

salem2008 wrote: »

Hi there,

We have received a letter this week stating that we may of been mis-sold PPI by Lloyds TSB on a loan.

Having read the details in the letter, it would certainly seem so!

The details in the letter don't indicate any mis-sale just because the cost of the insurance is several thousands pounds.

Do remember that you signed for that amount, it wasn't simply added without your knowledge or permission.

However, if you have valid (preferably verifiable) mis-selling reasons, then you would indeed receive a refund of the insurance together with 8% simple interest.

There will be no basis for complaint in the letter you've received, it's mainly sent to start the clock ticking on an eventual time-bar on any future complaint.

You now need to research exactly what complaint you can make...

Placida

If your complaint was to be successful, you would receive redress for a mis-sold single-premium PPI attached to a loan that is still in force.

Your PPI would be cancelled. Lloyds would then calculate how much more you have paid each month than you would have paid if your loan had been arranged without the PPI policy. ( If you have the original loan paper work, you may know what the monthly PPI policy cost is)
Interest is then added to each overpayment (usually at rate of 8% per year simple) to compensate you for the loss of use of your money.

Your loan would then be restructured so that the amount you currently owe and your monthly repayments would be as if your loan had been arranged without the PPI policy.

There are several useful threads on this forum.
https://forums.moneysavingexpert.com/discussion/1596473
https://forums.moneysavingexpert.com/discussion/2697331

Hope that helps.

Placida

Moneyineptitude wrote: »

The details in the letter don't indicate any mis-sale just because the cost of the insurance is several thousands pounds.

Do remember that you signed for that amount, it wasn't simply added without your knowledge or permission.

However, if you have valid (preferably verifiable) mis-selling reasons, then you would indeed receive a refund of the insurance together with 8% simple interest.

There will be no basis for complaint in the letter you've received, it's mainly sent to start the clock ticking on an eventual time-bar on any future complaint.

You now need to research exactly what complaint you can make...

Moneyineptitude, while I agree that a PPI CCL letter explains there is a potential limit on the time the consumer has to make a complaint to the firm and the FOS, doesn’t a CCL also state the reasons why the customer may have been mis-sold PPI and the actions available in respect of it?

Do you not think other points that the guidance states should be included in a CCL may have equal significance?

While the FSA guidance states
2. The PPI CCL should also set out the consequences of the customer not taking the invited action promptly. It should clearly and fairly explain that there is a potential limit on the time the consumer has to make a complaint to the firm and the Financial Ombudsman Service (FOS). The PPI CCL should indicate that if the consumer wishes to act, they should do so promptly because the time limit for them to bring a complaint may well have started to run.
Paragraphs 4-10 also give quite detailed guidance on Time limit complaining.

Do you not think other points included in the letter may have equal significance?

Content, clarity and treating customers fairly
1. In our view, a PPI CCL which is targeted at specific groups of consumers on the basis of a thoughtful analysis of the root causes of complaints should concisely set out a clear and fair explanation of the following matters:

That the customer may have been mis-sold.

Those key specific sales failings which have led the firm to conclude that the customer may have been mis-sold. The firm should explain (where relevant) that it has not reviewed the customer’s particular sale, but that they belong to a group of consumers whose PPI sales may have been affectedby certain common failings in the firm’s sales practices. The firm should explain why it thinks the customer may be one of the (group of) customers affected.

That there may be other reasons, in addition to the examples given, why the customer may have been mis-sold. The PPI CCL should make clear that the specific examples of sales failingswhich the firm has identified as potentially relevant to the customer are not exhaustive.

That the customer may have suffered financial loss as a result of the potential mis-sale, and so may be entitled to redress.

The action the customer is invited to take in response to the letter (if they consider they have been mis-sold), and how the firm will act on such response.

Every CCL does not list the same concerns on why a customer may have been mis sold PPI. From the information the op has given- a single premium on a 7 year loan, I would be inclined to think that the concerns listed in their letter may include “whether you understood the cost of a single premium PPI insurance and how it may be paid for.”

I may be wrong.

dunstonh

The CCL exists for one reason only. To allow companies to activate the time bar clock.

[Deleted User]

Placida wrote: »

There are several useful threads on this forum.

There are whole MSE advice articles for people starting a PPI complaint
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance

http://www.moneysavingexpert.com/reclaim/ppi-credit-card-insurance

dunstonh wrote: »

The CCL exists for one reason only. To allow companies to activate the time bar clock.

Yes, it's hardly just helpful advice from the Bank for the potential complainant!

Placida wrote: »

I may be wrong

As you say...

Placida

Moneyineptitude wrote: »

There are whole MSE advice articles for people starting a PPI complaint
http://www.moneysavingexpert.com/reclaim/ppi-loan-insurance

http://www.moneysavingexpert.com/reclaim/ppi-credit-card-insurance

True. The links I posted were in direct response to the poster's question re potential redress.

and if so, this is what could potentially be owed to us?

Moneyineptitude wrote: »

Yes, it's hardly just helpful advice from the Bank for the potential complainant!

I agree. I think that is what I actually said; CCL is a combination of both information and advice. It mentions the importance of the recipient responding to the letter as there may be a a time limit of three years from the date they received the letter in which they can make a complaint.
Helpful advice to my daughter as it alerted her to PPI she had had on 3 loans and as a result, she then proceeded to make a successful complaint for mis sold PPI.

Moneyineptitude wrote: »

As you say...

Sorry, final comment was cryptic. I was proved right.;)

wontletgo

I have been with Lloyds Bank for as long as I can remember having three mortgages with them over the years and several loans. They also undertook all my insurances; house, contents, life etc.

Realising that they had in fact missold me PPI insurance in the past especially regarding the mortgages I put in a claim only to be told that they have no records over 6 years old. All the mortgages were taken out prior and paid off in 2001.

Now it is obvious I am not going to get anywhere with this as I also do not have records but the point I am making here is that I bed the bulk of the 'misselling' of PPI took place well before 6 years ago and so what we are reading about at the moment is just the tip of the iceberg. They are getting away with far more that they are paying if the 6 year rule is applied.

As an offshoot can anyone tell me what actually happened to the records over 6 years ago. Were ther destroyed? I bet they were not.

salem2008

Hi everyone,

Firstly, thank you all for taking the time to reply, and apologies for my tardiness in not coming back quick enough to read/reply.

Having received the letter, and reviewed the conditions upon which we read could lead to us being mis-sold the PPI, I can confirm that:

We were not told the PPI was optional, it was determined that to ensure the loan was approved we should have it!
The fact that my husband had appropriate cover which could of covered the loan (employee benefits) - he was serving in the military at the time the loan was taken out. I was working via a temp agency at the time, so limited employee benefits (until 6 months later when I got a permanent job with full employee benefits i.e. lump sum death in service, sick pay etc)
We both had critical illness cover policies.
We were not informed about the fact that although we took the loan out together, only I was covered on the account should anything happen, being the first name on the document.
We were not aware that the amount of money that was lumped onto of our loan was PPI, and assumed it was just the amount of interest (yep, stupid I know, but truthful).

To say we were horrified to realise this is what has happened is an understatement, and we feel rather silly to have not felt in a position at the time to have questioned things more, but we needed the loan to clear debts.

We are working our way through the form, and digging out the required info they need. Which in fact is proving to be a lesson to make sure we are aware of all the policies we have and the fine detail too.

Thanks again, for listening to my ramble.

S

dunstonh

Realising that they had in fact missold me PPI insurance in the past especially regarding the mortgages I put in a claim only to be told that they have no records over 6 years old. All the mortgages were taken out prior and paid off in 2001.

How did they mis-sell you?
MPPI has the least mis-sales. Most complaints get rejected. Lloyds only retailed monthly premium MPPI and it was standalone direct debit (which is how it should be). If the mortgage was paid off in 2001 then it must have existed in the 70s or early 80s. Lloyds only began offering MPPI in the late 80s.

the point I am making here is that I bed the bulk of the 'misselling' of PPI took place well before 6 years ago

Correct. However, it also only really started in the early to mid 90s. So, it is more of a window then all historic stuff. Plus it mainly applied to loan and credit card PPI and not mortgage.

They are getting away with far more that they are paying if the 6 year rule is applied.

Not really. The regulator stitched the banks up somewhat by effectively requiring them to review complaints using 2011 rules and not the rules that were in place at the time of the sale. This has lead to far more being paid out than would have if the rules in the year of the sale had been applied.

As an offshoot can anyone tell me what actually happened to the records over 6 years ago. Were ther destroyed? I bet they were not.

The records would be destroyed. Loan PPI would not be an issue as account details are retained. So, whilst forms may get destroyed, the core details would still exist. However, as MPPI is standalone and not linked to any account, there is no permanent record. Once the policy is cancelled, the documentation for it is destroyed typically after 6 years in accordance with the regulators guidelines.

dunstonh

We were not told the PPI was optional, it was determined that to ensure the loan was approved we should have it!

Whilst being lied to is a mis-sale reason, it is also the hardest one to prove. Almost certainly you have no evidence to support your allegation and you can bet they dont either. Most complaints using that get rejected on that particular point due to lack of evidence but many do go on to succeed due to other failings.

The fact that my husband had appropriate cover which could of covered the loan (employee benefits) - he was serving in the military at the time the loan was taken out. I was working via a temp agency at the time, so limited employee benefits (until 6 months later when I got a permanent job with full employee benefits i.e. lump sum death in service, sick pay etc)

Good reasons for complaint with loan and credit card PPI. Not so good if its mortgage PPI.

We both had critical illness cover policies.

Not a valid reason as PPI does not overlap with CI.

We were not informed about the fact that although we took the loan out together, only I was covered on the account should anything happen, being the first name on the document.

Again, an unprovable allegation. He said, she said usually having no evidence to support.

We were not aware that the amount of money that was lumped onto of our loan was PPI, and assumed it was just the amount of interest (yep, stupid I know, but truthful).

That is a good reason for complaint. Doesnt always win but is good point to include.