Claiming PPI from 1988

The_Jester

I recently discovered details of an old bank loan I had back in 1988. I wrote to the bank twice claiming mis sold PPI but they gave me the run around.

I wrote to the FO who recently replied stating that the bank is about to make me an offer but it could take up to 8 weeks.

This would be nice just before Christmas and I'm curious roughly how much I would receive.

The details were as follows:

Loan amount £2000
Interest rate 19.7% (shocking ain't it)
PPI total £132
Loan period 18 months
Monthly payments £136.21

The total amount payable was £2451.78

I'm assuming interest would be added to the PPI amount from 1988 to today. Does anyone roughly know how much I'd receive?

Nearlyold

Around £480- £500 for a full refund - much less if they are using comparative redress

-taff

it will be 132 plus 8% simple interest, plus any associated interest over the life of the loan.

magpiecottage

-taff wrote: »

it will be 132 plus 8% simple interest, plus any associated interest over the life of the loan.

15% interest to, if I remember correctly, April 1993.

The_Jester

So it would be 15% interest for about 4-5 years and then 8% interest per year for about 20 years?

I assume the interest is compounded?

Nasqueron

Interest is simple not compound on these refunds

The_Jester

So I received a cheque from the RBS yesterday but it seems they used 8% simple interest for the entire calculation. When I called them they advised as since I took out a complaint via the FO I would have to contact the FO and the FO would contact them. I get the impression they’re trying their hardest to make things as difficult as possible.

I spoke to Mohammed at the FO and explained my claim should be calculated at 15% simple interest from August 1988 to April 1993 and then 8% simple interest from April 1993 until the present day. Mohammed told me it was all calculated at 8% simple interest and he wasn’t aware of any rules of the 15% simple interest. I pointed out that it was in the FO website and he quickly backtracked. I’m astounded someone on the helpdesk at the FO wouldn’t know this.

I’ve lodged a complaint with the FO regarding the incorrect calculation used by RBS.

The_Jester

They have also deducted income tax at 20%. Is this correct? After all it's hardly earnings it's money that should never have been deducted in the first place.

amersall

If you are a taxpayer then you do pay tax, if you are a higher earner you will owe them more tax.

If the interest does not take you over your tax free amount, you can reclaim this from HMRC.
The same applies if you are a non taxpayer.

societys_child

Income tax is deducted from the interest only, you can claim this back from HMRC if you're a non-tax payer, or you could owe more if you pay a higher tax rate than 20%.

Edit: cross posted with amersall

Nasqueron

The_Jester wrote: »

They have also deducted income tax at 20%. Is this correct? After all it's hardly earnings it's money that should never have been deducted in the first place.

You're only paying tax on the interest element of the refund like savings account interest, the refund of incorrectly taken premiums is not subject to tax. If you are not paying income tax or it doesn't take you over the tax free earnings limit you can apply to HMRC for a refund of that part.

FOS front line staff are notorious for not being that well trained and just telling people what they want to hear, the adjudicators and ombudsman are properly trained.