PPI refund but the bank wants to use the money to clear credit card debt.

Giggle1

Morning I currently have been offered a refund from Tesco bank for PPI but they are asking me to use it against outstanding credit card debt , which is fine but I have gone through a claims company and am concerned they will still be entilted to their their percentage, what I am concerned about is the fact my credit card debt will be cleared as Tesco will take all the PPI and I will be left with a bill from the claims company (Allay) that I can not afford . Has anyone else experienced this problem ?

[Deleted User]

Yes, you'll still owe the claims company.

Make sure you're proactive at setting up a repayment plan with them, as they won't hang about in taking collection activity.

[Deleted User]

Plenty of people have had negative experiences with claims firms. They are told to ensure you do not have any old debts etc before taking on complaints because of the risk that you would not see any refund but they would still charge you - it'll be in their Ts & Cs. I would explain to Tesco that you need the money, assuming it's simply a big card balance that you are struggling to pay down, perhaps they could split the refund so you have cash to pay the firm and pay off some of your balance. If you have an old debt and have defaulted on it, in a payment plan, that sort of thing, you would do well to initiate a formal complaint against the CMC as they should not have taken on the case if there was a risk of any refund being used against old debt 

dunstonh

The credit card company are not allowed to refuse to give you a cash refund of the PPI redress unless you have defaulted, in arrears, over limit, bankrupt or had debt reduced as part of an agreed settlement.
If you are in any of those scenarios, then it is frequently recommended that you do not use a CMC as you would be liable for the bill even if you do not actually get a cash refund.
Have you had payment difficulties with your credit card?  Is that why Tesco are refusing to give it to you in cash?  If not and you are repaying your debt normally then you can ask for it.

Giggle1

Thank you all for taking the time to reply .

Dazed_and_C0nfused

You may also be entitled to a small tax refund from the tax deducted from the statutory interest paid alongside the PPI refund.

HMRC would pay that to you so you could potentially use that to help pay Allay.

Unless you have signed over your right to tax refunds to a claims company as well