PPI loan caused unauthorised OD

bmullard

Hi all, I wonder if anyone can advise me?

As a student in the 2000's I banked with Lloyds who hammered me for all kinds of massive unauthorised overdraft fees, thinking that I've probably missed the boat on those but that's an aside...

Partly as a consequence of the above fees, I left uni with a large overdraft. When I started working, someone at Lloyds convinced me that rather than have an overdraft, I should take out a loan to clear the balance of the overdraft. Even though this was clearly a stupid thing to do, they presented it as my only choice as I was above my overdraft limit.

So, I took out a loan for around £2000 with PPI insurance (which they obviously advised me I should take out). I subsequently managed to lose my job after only paying back around £200 of the loan (I no longer have the paperwork).

On losing my job, my bank balance was in credit, not much, but in credit, yet I still owed most of the balance of the loan. I phoned to try to invoke the PPI, only to be told that as I lost my job due to misconduct (Timekeeping and attendance), the PPI was invalid.

The bank then proceeded to keep taking payments from the loan into an unauthorised overdraft, incurring further fees. They did this up to a balance of around £1750 DR and then evidently sold the debt to Lowell, plus the total of the original loan (Around £2200 apparently).

Lowell are now chasing me for both of the above sums. I have explained the situation to them, they tell me they have asked Lloyds who have told them that as the sum relates to a bank account, PPI transgressions aren't relevant.

Both of these items are on my credit file which I am currently trying to improve.

Can anyone please advise me on the best course of action?

Thanks in advance.

dunstonh

It is unlikely that the low cost of PPI in your loan would have made any difference. It was probably only around £15pm. You would have to demonstrate that a mis-sold PPI was also the cause of your debt and that appears unlikely given what you have said in your post.

bmullard

My argument with Lloyds is the fact that the PPI should have paid out when I lost my job, if this had happened, the original loan would have been settled by the PPI or is this not the case?

[Deleted User]

bmullard wrote: »

My argument with Lloyds is the fact that the PPI should have paid out when I lost my job

Unfortunately, the insurance was not designed to pay out in the event of you being dismissed. The same would apply if you left your job voluntarily.
You'll get nowhere with a complaint over this. The PPI was not mis-sold simply because you were sacked and so couldn't claim on it.

dunstonh

My argument with Lloyds is the fact that the PPI should have paid out when I lost my job

You were sacked. Insurance does not pay out when you are sacked. So, the claim was correctly rejected.

roonaldo

You may well win a PPI mis-sale complaint as this was a single premium policy. Any redress owed to you when be applied to the outstanding debt.

Trying to pin the PPI on your charges will be a lot harder, like Dunstonh has said it was only likely to put up your outgoings around £15 per month which isnt a lot. If you were going hundreds overdrawn then this was unlikely to be because of £15 a month.

Unfortunetly the PPI doesnt cover being sacked (as you said in your other post). Insurance is to cover unforseen events, not to pay out as a result of your actions. Otherwise the entire world wouldnt work and would just be claiming off insurance policies.