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PPI Refund offer, debt management plan and universal credit.

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I am in a joint debt management plan, and have a joint UC claim.
My partner works full time, I am a full time carer for our disabled son and recieve the relevant benefit.
I have been offered (in my name only ) a refund of PPI on a credit card.
The refund is for a total of £1528.46 and breaks down as:-
Premiums £818.37
Compound interest on Premiums £612.9
Erroneous fees £96
Compound interest of fees £1.19

My concern is this....RBS who issued the award will not tell me if the award will go to me or to a creditor.  I no longer have any accounts with RBS, they sold them all on to third party collection agencies.  But they will not confirm this and tell me who they will pay the award to.

If they pay it direct to me, great.  But, if they pay it to a collection agency on my behalf, I will not see the money, but I understand UC will see it as in income and deduct it from my award, ultimately leaving me financially worse off.

What do I do?  How much of this will UC count as income?  I have asked on my journal but as yet have had no response.  If it's a small percentage, it is worth a gamble, but I cannot put myself in a situation where I loose all of my UC award (approx 700 a month after deductions).

Any advice greatly appreciated.

Thanks.
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Replies

  • edited 29 June at 10:10AM
    dunstonhdunstonh Forumite
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    edited 29 June at 10:10AM
     But, if they pay it to a collection agency on my behalf, I will not see the money, but I understand UC will see it as in income and deduct it from my award, ultimately leaving me financially worse off.

    Only the interest payment could be classed as income.  The capital part does not.  It is highly unlikely that a figure of £614.09 would have an impact on universal credit.

    I no longer have any accounts with RBS, they sold them all on to third party collection agencies.  But they will not confirm this and tell me who they will pay the award to.

    Most banks have a separate team for doing checks before payment from those that look at the complaint and decide outcome.  So, it is quite normal for them not to know until those checks are done.

    If the debt was actually sold on with no right of clawback then you will receive the money.   If there is a right of clawback then you wont get the money.  If it was not sold on but the services of a collection agency used (some people incorrectly think of it being sold on what that happens when it is not) then you will not get the money.

    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.
  • universallyuncrediteduniversallyuncredited Forumite
    8 posts
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    MoneySaving Newbie
    Just to add...after further googling....
    I 'think' the portion UC will look at is the taxable part.  The interest.  However, as I do not work and have no taxable income, would i be exempt from this?  This tax year I have not and will not be able to work.  The PPI refund is in my name only, it was not a joint credit card....the more I read, the more.confised I get.
  • universallyuncrediteduniversallyuncredited Forumite
    8 posts
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    MoneySaving Newbie
    dunstonh, thankyou.  Just to clarify....
    I thought the taxable part would be viewed as a wage for that month, i.e. i had earned £614...your reply suggests this is not how it works?  Am I looking at this incorrectly?

    If the whole balance goes to a creditor, I am fine with that.  What I can't afford, is the whole balance to goto a creditor AND to lose my UC award for a month. It is this scenario I need to avoid.  I think you are suggesting this is highly unlikely but if you could clarify I would really appreciate it.  Thanks for your taking your time to help.
  • universallyuncrediteduniversallyuncredited Forumite
    8 posts
    First Post
    MoneySaving Newbie
    Just to add to the confusion, RBS have just told me the claim came from a company called Ingenious Legal Ltd, but they have no no valid letter of authority.  I have no idea who this company is, or why they acted on my behalf.  What is the letter of authority and how does this affect my claim, am I obliged to pay them anything if don't have this authorisation!?
  • brettctabrettcta Forumite
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    Did you fill in a ‘free PPI check’ via an advert on Facebook or some other social media? They’ll have your details from that if you did. 

    When Ingenious send you an invoice, ask them for a copy of a letter of authority and see what they provide. Almost guaranteed it’ll be an electronic copy of your signature which has been provided by a tablet/phone screen with your finger.
    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)
  • universallyuncrediteduniversallyuncredited Forumite
    8 posts
    First Post
    MoneySaving Newbie
    brettcta said:
    Did you fill in a ‘free PPI check’ via an advert on Facebook or some other social media? They’ll have your details from that if you did. 

    When Ingenious send you an invoice, ask them for a copy of a letter of authority and see what they provide. Almost guaranteed it’ll be an electronic copy of your signature which has been provided by a tablet/phone screen with your finger.
    Is such a signature legally binding? If so, why would RBS state it's invalid?
  • universallyuncrediteduniversallyuncredited Forumite
    8 posts
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    MoneySaving Newbie
    Spoke to RBS they have a signed letter from them from Aug 2019, but no letter of authority.  RBS say they cannot work on my behalf without this.  
  • universallyuncrediteduniversallyuncredited Forumite
    8 posts
    First Post
    MoneySaving Newbie
    Spoke direct to UC, they 'don't know' if it will affect my claim or not.  

    So this where I am.  I have the option to claim a 1500 refund. I may or may not get this money.  I have no issue there.  If I don't get the money, I may still have to pay an agency i I don't believe are authorised or have done anything to warrant payment and i may lose a months UC.  Leaving me hugely out of pocket.

    If I do get the money, I may still have to pay this agency and still lose my UC but it will pretty much balance out.

    Or I may get the money, still get my UC and not have to pay an agency.
    What do i do?? This is driving me mad.  :-( 
  • brettctabrettcta Forumite
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    A signed letter is usually a letter of authority. Ask RBS to send you a copy of that.
    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)
  • universallyuncrediteduniversallyuncredited Forumite
    8 posts
    First Post
    MoneySaving Newbie
    RBS have said there is no letter of authority and so will not deal with them.
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