Lloyds loan PPI compensation offer much less than premiums I paid! Advice pls

Greggo86

Hi - noob here so pls treat as such thanks! I'm looking for advice as to whether to challenge an offer from Lloyds on a loan PPI I was mis-sold in 1995.

Lender - Lloyd Bank
Date / duration of loan - Feb 1995 / 5 yrs
Loan - £6k
PPI - £1.2k
Monthly loan payment (loan + PPI) - £167
Total paid in premiums + 8% interest till Feb 2015 - 20% tax on interest - £3.53k (FOC / MSE methods)
Offer from Lloyds - £1.65k:mad:

I've just had an offer letter from Lloyds following a PPI complaint I made less than a month ago.

I complained the first time in 2012, used forceful selling pressures & no financial need to take out the PPI as the reasons. They rejected on the basis that forceful selling practices was not their policy (what a surprise). I did not follow up by taking to FOS.

In Jan 2015 I complained again on the same loan / PPI, this time citing the original reasons plus the single upfront front-loaded PPI selling tactic as another reason it was unfair. They wrote back today:

"However, as part of our ongoing review process, I've reassessed the complaint you made about the above accounts......result of reassessment = upheld"

They have made me an offer, asked me to contact them if I don't want to accept their decision or any part of it, said they'll pay in 28 days etc etc. They have already put the £1.6k refund into my account (I know, I know, I should not be still banking with them but hey ho).

Their offer is in their words "equal to our average compensatory payment.....due to the length of time which has passed, we no longer have any detailed records relating to your older loan account xxxxx. This means we have no way of confirming the amount of premiums paid, interest accrued or if any claims have been paid under the policy. As such, to resolve your complaint my offer for this loan is equal to our average compensatory payment."

Should I accept their offer, or ask for more? And if I ask for more am I in danger of them redacting their current offer in any way?

I have all the loan account statements, which show the upfront PPI premium of £1.2k added at the start of the loan, the monthly (combined loan & PPI) premium, the monthly interest rate of the loan etc. I never made a claim on the policy. I sent copies of the statements with my complaint questionnaire in January, but in this letter they do not refer at all to my supporting docs?

Seems to me grossly unfair for them to offer less than the premiums I paid (including the fair 8% pa interest), considering they have chosen to uphold my complaint. The interest only on the monthly PPI premiums is more than their offer!

Advice please....thanks:)

Nasqueron

Ring them up and offer to resend the statements and ask them to recalculate.

I'm sure someone else can clarify this but it seems a bit odd to me that you would calculate PPI refund based on 15 years worth of interest after the loan was repaid - surely the refund of premiums and associated interest would be for the duration of the loan (unless you were paying the loan off for 15 years?)

amersall

I agree, you only get back PPI that you actually paid, the interest associated with this and the 8% from the start date to date of redress.

amersall

I never made a claim on the policy.

The bank have no way of proving this

This means we have no way of confirming the amount of premiums paid, interest accrued or if any claims have been paid under the policy

If you have the insurance document, send this and they will contact the insurer to see if you made a claim.

Your PPI would have been approx £20 a month and then the interest on top, you should have got the PPI you paid with the interest plus the 8%, as they are making an average payment due to not knowing if you made a claim on the PPI, the offer is good in my opinion.

The PPI and interest only goes to the loan end date and not to the present, as nasqueron stated, unlike the 8% that goes to date of redress, is it possible you have calculated the loan interest from start date to present?, this would give you a higher figure.

Could you post up the actual PPI and the interest that you have paid? you may be right but we do not know how you get to the figure you say that you should have had.

Greggo86

Thanks for the prompt replies.

No documentation or notification by the bank at the time of the loan inception or during the term of the loan mentioned a separate insurer. I have the loan agreement. It does not call out the insurers by business name.

I may have all my bank statements from this period - would that be useful in proving I have not been paid out by a claim?

Would it not be a matter of them proving I did make a claim on the policy rather than me proving I didn't?

Anyway, for the calc I did the following:

Loan 6000
PPI 1205.84
total 7205.84
Term 60 mths

Monthly loan payment 59 x £139.73 (starting 25/2/95)
Final loan payment 1 x £32.78 (25/1/00)

Monthly PPI premium 59 x £28.08 (starting 25/2/95)
Final PPI premium 1 x £6.59 (25/1/00)

Total PPI payments = (59 x £28.08) + £6.59 = £1663.41 (A)

I've assumed 8% p.a. simple interest on each PPI premium from date of payment of premium to date of redress (assumed date of redress is 25/2/15). To simplify I used 2/3% interest per month simple interest (equivalent to 8% p.a.).

First PPI premium was paid 240 months before assumed date of redress.
a. Interest from first PPI premium is 240mths x £28.08 x 0.67% = £44.74
b. Interest from second PPI premium is 239mths x £28.08 x 0.67% = £44.56
etc
etc
x. Interest from final PPI premium is 181mths x £6.59 x 0.67% = £7.95

Total interest on PPI premiums from date of individual monthly PPI premium payment to date of redress:
= (a + b + etc etc + x) = £2338.54 (B)

Tax on the interest at 20% = £467.71 (C).

Total refund = A + B - C = £3534.24.

Have I missed something?

amersall

As this was 19 years ago and you do not have proof, neither do the bank, that you did not make a claim on the policy, they have given you a good offer, you have the PPI back that you paid and the interest on that.

£1663.41 was the PPI and the interest, that is what you would get with full redress not an offer,plus the 8%, as neither you or they have proof a claim was not made the offer is a good one.

You would have had an Insurance document at some point, your Bank statements are not proof, you could have 2 accounts, do you have them from 95/2000?, if you do it may be worth a shot if you feel you are owed more, or try and find out who the insurer was, even then, they may not have records from 19 years ago, if this were my offer for a loan from 1995, I would be taking the money tbh.

-taff

did you pay the loan off early?

Greggo86

No - I paid it off as per the schedule.