Advice on an overpaid PPI please

Poppys

Hi,

I am after some advice for my parents that are on state pension. They have just received a call from Lloyds advising that the PPI payment they had received just under a year ago was an incorrect amount. They received over £5000 and the bank has advised the payment should of actually been around £500. They asked my father if he was able to pay £4900 over the phone, in which he is unable to. The bank advised the case would be passed to the recovery team.
Please can someone advise how my parents stand in this case as it is now my making very worried.
Thank you in advance

Stevie_Palimo

That leaves the figure at just £100.00 against £4900.00 requested back from a payment of £5000.00 so does not add up.


I'd ask them to send a letter out and also all the records surrounding the actual payment made and loan details it was from then make a decision as to what the next steps are, I would imagine that they would either have the amount put into a repayment plan if it could be made to stick or if dealt with another way maybe a large chunk wrote off due to the banks error.


That said they must have noticed a figure such as £5000.00 at the time and thought this is more than the loan amount we had so alarm bells should have rang at the time.

dunstonh

A mistake in payment amount gives them no legal entitlement to that money. Only if you had reasonable expectation of the amount in question can you get to keep it. Its unlikely they would be able to show that as £500 and £5000 is far too big a difference.

Normally, in cases like this, a repayment plan is agreed. Typically, the period should be around the same as it took them to notice the mistake (so a year in this case). However, given the amount, they may allow it to be done over 2 years.

Poppys

dunstonh wrote: »

A mistake in payment amount gives them no legal entitlement to that money. Only if you had reasonable expectation of the amount in question can you get to keep it. Its unlikely they would be able to show that as £500 and £5000 is far too big a difference.

Normally, in cases like this, a repayment plan is agreed. Typically, the period should be around the same as it took them to notice the mistake (so a year in this case). However, given the amount, they may allow it to be done over 2 years.

Thanks for your reply. They were never advised how much they would receive. They had a call from Lloyds, where they asked a number of questions relating to the PPI, no amount was ever discussed. They then received a cheque in the post for the larger amount. They never heard anything else until the call today. I just think it is so unfair, if my parents were aware on how much they would of received they would of called the bank to advise of the overpayment. My father is terminally ill and I am worried as he is really getting himself worked up over it. I think all I can do is wait for the recovery dept to contact and arrange a repayment agreement. Thank you for your help.

tomtontom

To dispel the worry you could call up and ask to speak to the relevant team - it's generally better to be tackle these things proactively than wait for them to contact you - nothing worse than dreading each time the phone rings.

dunstonh

They were never advised how much they would receive.

So, that verifies that they cant use reasonable expectation as grounds. Also, a refund of £500 would suggest a smaller loan amount. So, getting £5000 is probably more like the total loan value. So, there is really no grounds for expectation.

I just think it is so unfair, if my parents were aware on how much they would of received they would of called the bank to advise of the overpayment.

its not unfair. Its unfortunate. Your parents are getting the benefit of an interest free loan. Unfair would be if he didnt have to pay it back as it would be the taxpayer and shareholders that would be left short.

My father is terminally ill and I am worried as he is really getting himself worked up over it.

he doesnt need to worry. This is actually a fairly common occurrence (overpayment i mean). It will not reflect on him or his wife.

magpiecottage

Although they are not entitled money paid to them in error, any such error was clearly with the bank.

That means it is inappropriate to simply ring up and demand the money - or to refer the matter to their debt recovery procedure (which is what "collections" means) if they cannot pay on the spot.

However, there is a further concern that such a call has simply come out of the blue. Could this be somebody trying to defraud the OP's parents.

I would be inclined to complain to the bank. If it was a genuine call, then it will be to their benefit to know that somebody is acting inappropriately.

If it was fraud, then they need to know about that too.

wolverines

I also find this quite fishy. I would definitely recommend either heading into a branch or getting a verified number from Lloyds website to call and confirm before anything further.

Alpine_Star

This is clearly a scam, as magpiecottage rightly suggests.


Banks simply don't call up out of the blue asking you to pay/transfer thousands of pounds immediately and goes against Lloyds own advice http://www.lloydsbank.com/help-guidance/security/suspicious-calls.asp

Insider101

From personal experience, this sort of thing does happen. Banks usually have a certain tolerance level within which they will just write the money off. If it is above this then they will request it back. £4,500 would be above all but the most extreme tolerance level.

However, obviously I can't tell your parents what to do given their circumstances but if it was me I'd tell them to take a long walk off a short jetty. They calculated the redress, your parents assumed they had got it correct and use the money in good faith. They do not have it available and see no reason why they should repay the money. It's not their fault the bank have got their sums wrong. I would suggest you point out the circumstances and that the newspapers/Which/Martin would be all over this. I don't think they would want the bad publicity. I certainly don't think they would take court action over it.