PPI paid on defaulted loan and now claim that money is outstanding

H_Jane

I have a strange question, I defaulted on a loan back in 2011 and received a cheque from the bank in 2014 relating to PPI on the loan. I have had a debt collection company show up on my doorstep claiming I owe money on the loan account.
What do I tell these people who are claiming I owe money? I always understood if I received payment of PPI against a loan that was defaulted they would take any money still outstanding from the PPI payment and if I received additional the debt was clear.
I have not had contact since 2014 until about 6 months ago when I advised them that I had received PPI payment and the money was offset against it. Evidently the bank have denied that any PPI payment has been made!
From memory, I think it was about £500 outstanding and I don't want any sort of financial issues as I have worked really hard to repair my credit record.
Any suggestions would be greatly received!

[Deleted User]

H_Jane wrote: »

I defaulted on a loan back in 2011 and received a cheque from the bank in 2014 relating to PPI on the loan.

If you received a cheque, the redress clearly did not go towards your unpaid debt.

H_Jane wrote: »

I always understood if I received payment of PPI against a loan that was defaulted they would take any money still outstanding from the PPI payment and if I received additional the debt was clear.

A dangerous assumption, I'm afraid.

Looks like the debt is still outstanding..

SonOf

When making a complaint on PPI on a debt you defaulted on that is yet to be statute-barred you run the risk of reactivating the debt.

The statute barring clock doesnt start from the date you missed first payment. It can actually be years after that. e.g. a 2011 debt may go until 2013 before the clock starts ticking. In that scenario, 2019 would be the last chance to get it. It is not uncommon for same debt collectors to do a last attempt to get money in the final year before statute barring.

it looks like you made it easy for them by providing up-to-date address details. You should check to see if the debt is statute barred or not.

-taff

If the debt was sold on the bank can't use the money to offset.
Phone the bank, ask them if this is the case. As far as the other company goes, you can send them the prove it letter. Go to the debt free wannabe board for more advice .

H_Jane

I never made a claim for PPI. I was simply sent a cheque from the loan provider.
Even though I defaulted on the loan up to 2014 I was under a payment arrangement for the outstanding amount. I stopped the payments in 2014 and did not hear anything until about 6 months ago.

H_Jane

Also I haven't moved, I have always been at the same address.

H_Jane

My understanding is not an assumption it is based on experience, as I had more than one defaulted loan in 2011 due to being made redundant. The other loan provider, who had sold the debt to a debt collection agency, paid off the remainder of the loan and sent me a cheque for the remainder of the PPI refund.

[Deleted User]

H_Jane wrote: »

My understanding is not an assumption it is based on experience, as I had more than one defaulted loan in 2011 due to being made redundant. The other loan provider, who had sold the debt to a debt collection agency, paid off the remainder of the loan and sent me a cheque for the remainder of the PPI refund.

It doesn't natter what other lenders may have done, you need to urgently check what this particular lender did. Any off set will have been detailed in your redress letter from 2014. If you no longer have this, you need to clarify if part of your redress went towards the outstanding debt or, more likely, if it did not.

You have indeed made an assumption, I'm afraid.

Bermonia

H_Jane wrote: »

My understanding is not an assumption it is based on experience, as I had more than one defaulted loan in 2011 due to being made redundant. The other loan provider, who had sold the debt to a debt collection agency, paid off the remainder of the loan and sent me a cheque for the remainder of the PPI refund.

Of course it is an assumption, you have assumed that what one lender has done ALL lenders will do

MovingForwards

Are you sure it was PPI?
Only reason I ask is one bank sent me a cheque 3 years ago due to their miscalculation of interest and charges on an old loan I had with them. It came out the blue and wasn't offset against the debt, neither have my two PPI awards.