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PPI used to clear arrears

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Last year I commenced a number of PPI refund claims.  RBS have finally declared a refund of £1173.
Unfortunately not long after I had to enter into an IVA which includes RBS being paid monthly.
RBS have sent a letter stating that the refund is being used to clear arrears on my credit card so I know I will have to contact the IVA team to advise them of a reduction in their payments.
Allay who were the company running the claim have been advised that I will not get a payout into my bank; they say though that I still have to pay their 24% commission and will write to me to set up a repayment plan.
Can they legally enforce this please?

Comments

  • Vizionz
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    To add to the problem I have been laid off work and now pending interviews which are all on hold due to COVID-19
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
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    Yes.  They can take the money you owe them, and them return any surplus.

    The claims company have done as you asked in posting your complaint, so you will need to pay out of your own funds.
  • brettcta
    brettcta Posts: 4,693 Forumite
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    They can and absolutely will enforce this, it’s the one thing they excel at
    helpful tips
    it's spelt d-e-f-i-n-i-t-e-l-y
    there - 'in or at that place'
    their - 'owned by them'
    they're - 'they are'
    it's bought not brought (i just bought my chicken a suit from that new shop for £6.34)
  • dunstonh
    dunstonh Posts: 116,888 Forumite
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    edited 10 April 2020 at 1:05PM
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    Can they legally enforce this please?

    Yes.

    Firstly, lenders are allowed to set off the redress against any debt that is in arrears, defaulted, written off or had amounts reduced as part of an agreed settlement.    

    Secondly, the claims company is allowed to charge against the full amount of the redress even if you do not get any cash in your hands.

    However, the claims company should have told you told this would happen before they entered into a contract with you.    This is the known outcome for anyone with arrears etc.   So, the claims company may have failed in their duty if they did not tell you this.  

    If you believe they did not tell you then you can raise a complaint to them that they should have told you that you were not going to receive the money as you were in arrears and warned you of the consequences.   Something you say they failed to do.     It doesn't have to be a long letter.  It can be just a couple of sentences.   I would drop some sentences in there like "they failed to treat you fairly" and "their lack of due diligence and finding out the facts of the situation has led to an outcome that is of financial detriment to me".     (FCA has the treating customers fairly guidelines - hence the reference to fairness and "outcomes" is one of the FCAs current buzzwords).

    Claims companies, as of April last year, became regulated for the first time under the FCA.   The FCA is a stronger regulator and it gives you access to the FOS if the claims company do not handle your complaint in a satisfactory way.    

    If the claims company reject the complaint and you disagree, you have the right to refer it to the FOS.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • John_
    John_ Posts: 925 Forumite
    First Post Name Dropper
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    Vizionz said:
    Last year I commenced a number of PPI refund claims.  RBS have finally declared a refund of £1173.
    Unfortunately not long after I had to enter into an IVA which includes RBS being paid monthly.
    RBS have sent a letter stating that the refund is being used to clear arrears on my credit card so I know I will have to contact the IVA team to advise them of a reduction in their payments.
    Allay who were the company running the claim have been advised that I will not get a payout into my bank; they say though that I still have to pay their 24% commission and will write to me to set up a repayment plan.
    Can they legally enforce this please?
    Yes, they can. They kept up their side of the agreement, and provided the service that they agreed to. The payout has reduced your debt, and they are now due the amount which you agreed with them.
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