Settled debt and PPI refund

Heleno_2

Yes, I see your point -taff, but that looks like a moral argument. One that could be used for informal lending but I suppose what I am thinking is that this was a business arrangement.
From what I can see the legal definition seems to be that a settled debt is an agreed final payment between both parties but then I am no legal or financial expert!

It looks like the ombudsman is a clear option.

-taff

It's not a moral argument.
A settled debt just means they won't pursue you for the rest of the debt.
It doesn't mean you don't owe the money any more.


Ask on the debt free wannabe board for more clairifcation

Heleno_2

Thanks -taff. Will do.

dunstonh

but that looks like a moral argument.

It is moral and logical. You didnt pay the money so why should you get a refund of something you didnt pay?

One that could be used for informal lending but I suppose what I am thinking is that this was a business arrangement.

And you broke that agreement by failing to pay. However, the lender agreed to not chase you via the courts in return for a settlement.

It looks like the ombudsman is a clear option.

The rules do allow the redress to go against arrears, defaults and amounts written off as part of an agreed settlement. However, it can only be against the same debt that the PPI was related to. The FOS will sometimes instruct the lender to pay the money to the individual where there are more pressing debts that could be cleared.

Here is an ombudsman decision which sets out their position:
http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=36608

"....agree it is fair and reasonable for Barclays to set the redress against the losses it
incurred with the 8% interest, less the value of any claim, being paid directly to Mrs D."

or here:
http://www.ombudsman-decisions.org.uk/viewPDF.aspx?FileID=73454

Heleno_2

Thanks dunstonh. I'm still confused and a little alarmed, to be honest. I think that most people would assume that if a debt had been made a settled agreement, this would mean that the debt no longer existed. the fact that a bank tried to revive that debt at a later date is alarming. Thankfully the ombudsman didn't allow that happen.
I did read the links, so thankyou for your time , but i suppose I'm still not completely clear.

The rules do allow the redress to go against arrears, defaults and amounts written off as part of an agreed settlement. However, it can only be against the same debt that the PPI was related to. The FOS will sometimes instruct the lender to pay the money to the individual where there are more pressing debts that could be cleared.

This really confuses me! I don't understand the difference between the first sentence and the second.

dunstonh

I think that most people would assume that if a debt had been made a settled agreement, this would mean that the debt no longer existed.

And probably most people would not then expect to get a further refund from the company they failed to repay the money to.

The rules do allow the redress to go against arrears, defaults and amounts written off as part of an agreed settlement. However, it can only be against the same debt that the PPI was related to. The FOS will sometimes instruct the lender to pay the money to the individual where there are more pressing debts that could be cleared.

This really confuses me! I don't understand the difference between the first sentence and the second.

The rule of set off allows the bank to take money from one place to repay a debt on another. e.g. if you credit card is in arrears, they can use money on a credit balance on your current account against that credit card. However, in the case of PPI redress, they cant do that. They can only use it against the debt the PPI was linked to. e..g. credit card PPi can only go against the credit card balance. Not a loan or current account.

Heleno_2

Thanks dunstonh. That helps.

-taff

Heleno wrote: »

Thanks dunstonh. I'm still confused and a little alarmed, to be honest. I think that most people would assume that if a debt had been made a settled agreement, this would mean that the debt no longer existed. the fact that a bank tried to revive that debt at a later date is alarming..

If you make a PPI compaint against a company you failed to pay all the monies you owe to, it's you who are reviving the debt, not them.

If a debt becomes statue barred, they cannot revive it.

But as above, they are allowed to keep any monies owed first from any PPI redress.

Heleno_2

Thanks -taff. Is statue barred a time limit?

-taff

6 years from the default date. But the default date may be a few months plus or minus depending on when the company decides it's in default, or when it actually is in default.