Definitive legal answer please PPI

Ruby_woo

Hi everyone

I'm getting varying answers on this one. So if anyone is positive they know the legal standing then please advise.

Over the years several loans have been taken out with well known high street bank and paid back. PPI mis sold IMO.

The last loan has been defaulted on and a balance remains and is not being paid ATM. If OP is successful in a bid to reclaim monies on all PPI loans over the years and an amount of money is due to OP can the bank use all the money to pay off the one loan that was defaulted on? None of the money can be used? Or only the monies from the amount awarded to him for the last loan could be used to pay back some of the money still outstanding?

Conflicting opinions on this from the bank itself??

Please help if you can.

Thanks.

roonaldo

The bank can offset the redress against any money still owed to them.

booksurr

if you want a definitive legal answer then have your day in court and find out, in the meantime don't expect to be spending the PPI compensation because the bank will have offset it

dunstonh

The regulator allows lenders to offset the redress against arrears, defaults and amounts written off (including those as part of an agreed settlement).

It cannot use the redress against unlinked debts. e.g. cannot use loan PPI redress against a credit card default. However, if it is a loan and it has been a chain of loans (on loan repaid with another) then it can use the redress from the loans in the chain to offset.

Ruby_woo

Thanks everyone. I think the bank in question need to know as much as you guys, as they can't make their minds up. It's not my PPI claim though so not my money to spend but I shall make the answers known to the person in question.

First, person from the bank said, we can only take the money from the PPI from the loan that is outstanding not from the loans that are settled and the second person said that we will send you any compensation due and will not use it to pay any outstanding debts so.......

Who knows will wait and see.

Thanks anyway.

[Deleted User]

Not a "definitive" legal answer, but here's a link to the off-setting rules;
http://www.moneysavingexpert.com/banking/setting-off

As for Bank staff apparently not knowing these rules, none of the people you spoke to will have been in a position to properly comment. If the Bank decide to offset, it won't be customer-facing staff who make that decision.

Your "friend" will just have to wait and see, he or she may not even have a successful complaint!

Ruby_woo

Thank you. I honestly think the call centre staff don't know what they are on about as today the person dealing with the PPI case called OP and when the OP asked if they would receive the compensation if awarded, they said yes as they don't offset it?

It's a minefield. Will have to be patient.

Thanks anyway. Much appreciated

Ruby_woo

Thought I would update. Cheques were sent out after PPI claim was upheld and they didn't deduct the monies off outstanding balances.

welshgasman

Lloyds by any chance?

saver861

Ruby_woo wrote: »

Thought I would update. Cheques were sent out after PPI claim was upheld and they didn't deduct the monies off outstanding balances.

Well I would have expected that any monies owed by a person would be offset against any compensation - just seems common sense apart from the law. If you owed me £1,000 which had defaulted and I owed you a £200 refund on something, then I would not be giving you £200!! I would be asking for the remaining £800.

However as your op was on behalf of a friend, I'm guessing a lot of info is lost in translation and as such not clear cut.