PPI and right to set-off

SteveP108

Good afternoon. I would like advice from others who have claimed PPI where the bank are suggesting the right to set-off.


I have read various other forums, and have read case studies and complaints adjudciated by the financial ombudsman. My situation doesnt seem to have a clear answer.



I have made a PPI complaint on a loan from 2001. The loan was with Natwest, and I have received an offer for £5900 as the PPI was mis-sold. The loan was paid in full and had no arrears attached to it.


In 2013 due to illness, and marriage breakdown I fell into financial problems and one of my debts was a loan with Natwest. A loan taken out in 2012. I eventually defaulted on the loan and the default amount was sold onto Cabot financial. The loan was legally assigned in 2017. Natwest advised me that they had closed the account, and Cabot were now the legal owners. I have no other debts linked to Natwest, and the Cabot debt has a few thousand pounds left to clear.


Natwest have told me that the offer is on hold as they are considering the right to off-set the 2012 loan.
My question is as follows. Under what circumstances do Natwest have the right to set-off in my circumstances? I am struggling to see where.

The loan account from 2001 and 2012 are not linked or associated.
The loan is presently owned by a third party. I can only assume they are looking to buy the debt back and pay-off? (even though separate accounts and not connected to PPI claim)
I am looking to use the offer to clear various debts anyhow, I just have more pressing.
Any advice welcome.

Thanks.

-taff

They don't have to be linked [although technically they are, as they are the ame financial product, owned by the same person] they are with the same banking group.
Page 3
https://www.financial-ombudsman.org.uk/files/2827/40.pdf

SteveP108

Thank you for your reply, it is appreciated.



It is my understanding from an ombudsman case study that 'where the complainants loan or credit card is in arrears the firm may make a payment to reduce that loan or credit card'


I also read on here that 'they can only set-off PPI refunds with the same account that the debt is linked to', and that they cannot set-off against a difference debt within the group!


I am so lost!!!!



Will likely just sit it out see what they decide, and then possibly complain through ombudsman.

SteveP108

Just a quick update for anyone in a similar position. From previous Ombudsman rulings and FCA rulings....

PPI refunds can only be offset on accounts to which the PPI applied. Banks will try it on with the setoff rule, even though they know it isnt allowed.

I challenged Natwest/RBS and they have agreed to make the payment to me as the two loan accounts were completely separate, and the PPI applied to an old loan which held no arrears.