RBS PPI Payout Delay

NoviceVoice

Hi 
I made a claim for PPI against NatWest via RBS just before the deadline which was successful and they made an offer which I accepted. I have now received a text from them yesterday stating they were unable to process payment as they had to undertake further checks relating to arrears and insolvency. I had a loan and credit card with NatWest some 16 years ago, where I was mis-sold PPI on both products and got into financial difficulty and went into arrears on my accounts. NatWest sold my debt to a debt company to whom I then made monthly payments via a debt management plan. However I managed to re-mortgage and release some equity from my home and the Debt company accepted a reduced lump sum payment to clear the debt. My question is, can NatWest/RBS renege on their offer and not pay out on their PPI offer because of the circumstances in which the debt was cleared? Thanks for any clarity on this.

[Deleted User]

NoviceVoice said: I managed to re-mortgage and release some equity from my home and the Debt company accepted a reduced lump sum payment to clear the debt. 
My question is, can NatWest/RBS renege on their offer and not pay out on their PPI offer because of the circumstances in which the debt was cleared? Thanks for any clarity on this.

They are not "reneging", just as you've been told, they will pay a refund.

 Unfortunately for you, the refund looks likely to  go towards the debt you never fully paid off and so still technically owe. 

When they agreed a debt settlement that did not end the debt, it simply meant that they would no longer chase you for the remainder. 

They are absolutely allowed the right of set off. 

NoviceVoice

Thanks very much for your reply. So this still applies even though they sold the debt to another company and my agreed settlement was with the Debt Company?

[Deleted User]

NoviceVoice said:

So this still applies even though they sold the debt to another company and my agreed settlement was with the Debt Company?

I'm afraid so. The Banks generally have a clawback clause for exactly this eventuality. 

On the plus side, you'll have paid ALL your old debt instead of just part of it...