PPI Offer..Is it fair??

stuben32

Hi Everyone,

I put in a PPI claim with Lloyds middle November, for a credit card I took out (originally from TSB before they merged) in 1989.

I've had an offer today of £14.5k, but wondering if that is a fair offer?

I've used some calculators on some site that report the offer should me much, much higher, but a bit sceptical that these may be inflated to get customers.

On my original form I did request that I was given a detailed breakdown so that i could confirm any offer, but they have just given a figure based on the card balance at Dec 2011, which was £10,500, and that the figure without PPI would be £8000. So didn't give a breakdown as to how far back their search went.

I'm also aware that the offer was received 2 days before the 8 week period where they would have had a penalty to pay, so thinking was this offer a "stop-gap" offer to avoid that?

Any advice would be appreciated

Thanks

Stuben32

dunstonh

On my original form I did request that I was given a detailed breakdown so that i could confirm any offer, but they have just given a figure based on the card balance at Dec 2011, which was £10,500, and that the figure without PPI would be £8000. So didn't give a breakdown as to how far back their search went.

This means they do not have the records to accurately work out how much PPI you have paid and are making assumptions based on the available data. This typically involves looking at the balances in the periods they do have records for and calculating it based on that.

I've used some calculators on some site that report the offer should me much, much higher, but a bit sceptical that these may be inflated to get customers.

Calculators with what sort of assumptions? Some of these have very high premium assumptions. Whereas Lloyds will know their premium rates. They just wont know your borrowing history.

If you have the records available to show them,then do so.

I'm also aware that the offer was received 2 days before the 8 week period where they would have had a penalty to pay, so thinking was this offer a "stop-gap" offer to avoid that?

The 8 week period incurs no penalty for going beyond it. So, what penalty are you referring to?

stuben32

thanks for the reply dunstonh - much appreciated

They didn't include any date ranges used in their calculations, just figures so that is hard to check the amount, even if I don't have evidence to the contrary, i would have assumed that they would include that information for transparency. Smells of "Smoke and Mirrors" a bit.

One of the sites used was backto88 - their calculator allows for modification to the APR of card and the amount of PPI premiums were charged at. I could try that again post offer, if Lloyds had included the dates used in their calulations.

The backto88 calculator uses the following to come up with a figure - is it wrong?


1. We take the monthly cost of PPI you enter (or that is estimated based on a typical cost of £1 per £100 statement balance each month) and apply the interest rate of the card.

2. We work out what the monthly cost would have been for just the PPI on its own with interest applied.

3. Then we do the same for the next month but when we calculate the interest for the next month, we add in the PPI and interest from the prior month as well. This is called compounding and is the way that you are charged when you do not pay off your card in full.

4. We continue to compound all the monthly payments with interest that you made. If, at any point, the running total of the PPI and interest exceeds the balance on the card, this means that your card would have been in credit had it not been for the addition of PPI.

5. For any periods where your card would have been in credit, we add statutory interest to the credit amount for that month based on when it occurred. 8% pa if after 1st April 1993 or 15% pa if before.

6. If your card was paid off or closed before present, we take the amount of PPI, the amount of interest and the amount of any statutory interest on credit periods to that point and apply the prevailing rate of statutory interest to present.

7. For the date range of your card, we add up the amount of PPI, the amount of interest and the amount of all statutory interest.

I'm pretty sure I read somewhere, possibly on here, that when a business didn't offer decision within 8 weeks, and the claimant went to the FOS, then the FOS would apply a £800 fine against the business.

-taff

All you ever wanted to know about how firms should be calculating their redress.....there is no compounding of anything....
http://www.financial-ombudsman.org.uk/publications/technical_notes/ppi/redress.html#redresscc

[Deleted User]

stuben32 wrote: »

I'm pretty sure I read somewhere, possibly on here, that when a business didn't offer decision within 8 weeks, and the claimant went to the FOS, then the FOS would apply a £800 fine against the business.

This is nonsense, I'm afraid.
The FOS charges the firm for any referrals regardless of how long it took them to respond to the initial complaint.

Successful complaints are not usually referred.:)

Nasqueron

PPI redress is calculated along a pre-determined process as shown by the FOS on the link above.

Your site above is nonsense, £1 for £100 of debt is far higher that they charged, normally charges were around 70p; moreover you get simple interest year on year, not compound. If you don't have statements proving what you paid each month then they are allowed to reconstruct based on estimates, if anything you got lucky as the card balance was so high. You won't get any more money quoting a third party website using their own process