PPI reclaim set off to 3rd party creditor rules and guidelines

Foraant

Hi all

I would like the opinions and current experiences surrounding PPI redress claims being set off to pay debts that are now owned and held with 3rd party creditors, as thus far I’ve experienced very conflicting scenarios from claims done by family and friends.

Generally, what I’d like to understand more is

1) if there are no standard terms or provisions in the initial credit agreement stating the same rights are transferable to a 3rd party, under what basis does that provide an equitable right for the third party to be a beneficiary to any redress owed to the debtor in the event of the original lender upholding the PPI complaint?

2) in terms of loans, leaving the unpaid premiums to one side which understandably can be used to pay down the existing debt, as no payments were ever made to that balance of PPI added to the loan which is outstanding; why would it be appropriate, suitable or legal for any form of statutory interest the claimant is entitled to be paid go to the 3rd party?

Given there is wrongdoing in the first place on the part of the lender which has disadvantaged the borrower and policy holder, I see this as very unfair for others to be beneficiaries of a payment which is supposed to put that person in the same position as they were prior to being sold PPI. If interest is the element that determines the redress of putting someone back in a similar position before taking out the agreement why would that part at least be paid to someone else?

3) if it is the intention of paying the redress and in particular any form of statutory interest when a compliant is upheld, what factor does personal hardship take effect in trying to redirect the redress in the hands of the one who puts forward the miselling complaint in the first place; instead of that money going to a unrelated 3rd party?

I welcome everyone’s views and if possible, links to previous cases with the ombudsman or legal would be much appreciated concerning the topic.

Many thanks to everyone in advance

Bermonia

It’s fairly simple... banks reserve the right to offset.

Ombudsman are very happy with this approach.

If you are in genuine financial hardship, that is to say that there rent/mortgage/utilities arrears then explain this to the lender - in cases of ‘genuine’ hardship they would usually release funds accordingly, however expect to provide proof and for there to be a high margin to be considered.

Foraant

Are you saying they reserve the right to offset even from their own wrongdoing in the first place? Is that not contradictory in any format - be it law or guidelines they adhere to?

-taff

People wrongly assume that a debt collection aganecy has bought a debt outright from a company when usually, in the case of large companies, the debt has merely been outsourced and the debt can be returned.

-taff

Foraant wrote: »

Are you saying they reserve the right to offset even from their own wrongdoing in the first place?

What wrondoing?

Bermonia

Are YOU saying that you should reserve the right not to pay your outstanding debts?

Whatever your thoughts on the matter (however wrong they may be) and no matter how aggrieved you may feel this is perfectly acceptable and reasonable for lender to do - you can waste more time on your fruitless endeavour or accepted that a large chunk of your outstanding debts has just been repaid.

Foraant

No I’m not saying I’m asking if that’s what legally is permissible or under their guidelines. Nobody thus far has actually provided if this is backed by any of the two.

They are providing redress and compensation because of doing and selling something which was wrong in the first place. So in performing an act of wrongness, why should the guilty dictate at their discretion the terms as to where that money is distributed? This is my point and it appears there aren’t any substantiated arguements to say otherwise. Apart from they ‘Reserve’ and ‘the ombudsman is comfortable with this arrangement’. I’m beginning to think there’s a conflict of interest with this site and it’s users, are you all bank employees acting in disguise or just fearful of what the system misleadingly dictates to you?

-taff

If you borrow money and don't pay it back why could you then make money from not paying it?
I don't work for a bank but even I can comprehend that that is not logical.
Besides, selling it at the time it was sold was not wrong, it's since certain rules were made after the selling that it has now become wrong, retrospectively.
No one had a crystal ball at the time to tell them this

Foraant

Well the change of rules did not occur just randomly or because someone really hates the financial system. Clearly not knowing their customer and their circumstances properly was an act of malpractice in the first place. Millions of agreements have been misold and have put people in to a lot of hardship. Otherwise they would reject complaints. Paying your debts is a completely seperate issue here, this from what I understand has no bearing especially if you have an arrangement in place already. This is a refund and compensation for the inconvenience brought about selling you something not suitable for you and carries implications further down the line.

So what logic can you see a bank which has admitted doing something wrong, then having the right in deciding where that money goes, and having the right to pay a party who was never and nowhere mentioned in the original agreement in the first place? Where’s your logic in that? What rules confirm your logic?

[Deleted User]

This discussion is going nowhere.
When an OP whines that posters who simply do not agree with their deliberately provocative comments must be bank employees, it's long past time to stop feeding.

Foraant

The conversations not going anywhere because clearly no one has any substance to provide a proper insight into the situation. It’s quite annoying of the lack of knowledge and education to quite a serious topic/issue.