How to correctly calculate 8% compensatory interest

daj199

Hi,

I'm executor for my late father and I've followed advice on here to make a PPI reclaim. He did hold PPI on one of his old loans and have offered me compensation. I want to check that the 8 % compensatory interest per year has been calculated correctly.

The loan in question was for £15,000 in 2003 and £1,500 PPI was added at the start. My father made monthly repayments, finally paying off the loan in 2010. In the letter re. compensation, they are refunding:
1) the initial £1,500 PPI
2) interest incurred on the £1,500 during the period of the loan, and
3) 8 % compensatory interest per year, applied to the total of 1) and 2).

Now, from my calculations, I believe they have applied the 8% compensatory interest for 9 years - ie from the date that the loan was paid off until now. But I was wondering if the 8% compensatory interest should be applied from when the loan first began (so 2003 until now)? Perhaps it should be?

Many thanks in advance
Dave

Nasqueron

See the link below on the rules they have to follow


https://www.financial-ombudsman.org.uk/publications/technical_notes/ppi/redress.html#compensation