Settled debt and PPI refund

Heleno_2

Hi All,
I've discovered that I have had PPI on 'partially' settled cc debts and I am making a claim. My question is, if I am successful in my claim for PPI, can it be used by the cc to pay the debts that have been formally settled?

dunstonh

My question is, if I am successful in my claim for PPI, can it be used by the cc to pay the debts that have been formally settled?

They are allowed to offset the capital part of any refund against arrears, defaults and amounts written off as part of an agreed settlement.

Heleno_2

So if I get a refund they can keep it?
I thought I heard something about this on Moneybox a while ago and I think they said that if a settlement had been made then the PPI refund couldn't be used to pay off settled debt. I can't quite remember though and it could be wishful thinking!

-taff

Yes, they can put any redress to amounts owing, written off or any claims made first. Some companies will let you keep the interest, some won't.

Heleno_2

Thanks Taff,

Just found an article saying that a precedent has been set recently stating that banks etc cannot keep the PPI but it was only made on 9th of February . I'm not allowed to post the link but it was on lexisnexis website Green v Wright.
Could be interesting.

dunstonh

Just found an article saying that a precedent has been set recently stating that banks etc cannot keep the PPI but it was only made on 9th of February

They cannot set off against unrelated debts (say a credit card PPI where you have a loan with arrears). They also cannot set off against debts sold to another party with no ability to bring back to the bank.

The case Green v Wright is about an IVA. That is different to having an unpaid debt.

Heleno_2

Thanks Dunstonh.

I had help from a charity to make arrangements to pay off my debts and my credit report states that they are now settled. Although, it appears that in some circumstances they are not?

dunstonh

Settled means the lender will not come after you for the debt via the courts. However, the debt still exists.

-taff

If you paid back the full amounts of any debts owing, you'll get your entire redress back. If you only partially paid and had amounts written off, you won't.
Sometimes you may get a letter telling you are getting x amount back, then they will check records and reduce the amount by amounts outstanding, owing or written off.

Don't get youe hopes up too far and you'll be pleased with whatever you do receive.


Plus, PPI is not a legal matter, if you attempt to take a bank to court rather than the ombudsman, you may end up losing far more money.

Heleno_2

Ok dunstonh and -taff.

That's clearer. I still don't understand how a debt can be settled or written of but still be owed. I don't remember any codiciles on any communications saying that they reserved the right to claim for further money at a later date.

-taff

Well, say you owed me £100 but only paid back £20.
I agree not to chase you for the remaining £80.

Then you want to complain that £20 of that was PPI and you are entitled to it back.

You have only paid £20 of the £100 outstanding and you want to claim a further £20 back, thus leaving me £60 out of pocket.

So I say to you, yes, you did indeed pay £20 in PPI but because you owe me £80, I'm keeping it and putting it towards the money you still owe.