PPI Reclaiming discussion Part II

tiggrae

tiggrae wrote: »

It is an agreement which is not regulated by the Consumer Credit Act 1974 - it would say on the top of your agreement whether it is regulated or not - the CCA '74 applied to loans not exceeding £25000, if they did they are classed as unregulated agreements (ie not subject to the provisions of the consumer credit act 1974)

this is how Rule 78 is calculated

This applies to fixed-sum loans taken out before 31 May 2005 and are regulated by the Consumer Credit Act 1974.

Rule of 78 is a way in which some lenders will calculate early repayment costs.

It works out how much interest you should have paid at any time during the repayment period of a loan. Its main feature is that the interest is not spread evenly over the payments during the term of the loan. Under rule of 78 you pay more interest in the beginning of a loan and as each repayment is the same size, the part paying off the capital is smaller in the beginning of the loan increasing over time.


The number 78 is based on the 12 months of a one-year period. When the 12 months are added together (12+11+10+9+8+7+6+5+4+3+2+1) you get 78. This means that if you have a loan to be repaid in one-year, the lender will expects you to pay 12/78ths of the interest in the first month and 11/78ths in the second, continuing like this until the final month.
If the loan is paid off early, the lender may use the rule of 78 to determine how much interest you do not have to pay. In many cases, due to the interest element being larger in the repayments at the beginning of the loan, a large amount of capital can remain to be repaid.


Early settlement penalty


This applies to fixed-sum loans taken on or after 31 May 2005 and that are regulated by the Consumer Credit Act 1974.
If the loan is paid off early, the lender may charge a penalty (subject to a set formula) of 30 days or 1 calendar month. This applies when the original loan term is more than 1 year and the advance is £25,000 or less. For terms of 1 year or less, no redemption penalty is payable.
This penalty is set out in the rules governing repaying loans early and is covered by the Consumer Credit (Early Settlement) Regulations 2004.

wildanna

marshallka wrote: »

Have you had a final response from them in months at all??

Have you actually sent them any letters yet other than to get your SAR??

Also loan.co.uk was fined already.

no final response yes sent the templates as well all the letter says is please find enclosed a transcript of the sale thats it dont know wat to do now

tiggrae

wildanna wrote: »

no final response yes sent the templates as well all the letter says is please find enclosed a transcript of the sale thats it dont know wat to do now

Have you read the transcript of the sales call - also, when did you take out the loan /ppi

tiggrae

cot1198 wrote: »

Di

I took out the loan with nemo in may 2006 and paid it off in july 2007 the ppi was single premium and was almost £10,000 added on top of the loan I only found out about mis-selling on this site the other week, to make matters worse the settlement figure was £2,000 more than borrowed even though I had made payments for 14 months

Cot

they cannot have used Rule 78 to calcuate the settlement - can you post the actual figures you received in respect to your settlement - have you started your claim against them - is it for mis selling of the original loan or for the unfair settlement received on early redemption?

marshallka

wildanna wrote: »

no final response yes sent the templates as well all the letter says is please find enclosed a transcript of the sale thats it dont know wat to do now

If you have proof of sending the letters in and providing your loan is within jurisdiction of the FOS and its over 8 weeks since you complained them you can take your complaint to the FOS and stop wasting time with them. When was the loan??

wildanna

tiggrae wrote: »

Have you read the transcript of the sales call - also, when did you take out the loan /ppi

yeh,october 2004 on the last page all the advisor says is the lender has given us total inclusive,erm,a total inclusive package thats going to be covering yourself and your husband for accident sickness and lifecover and involuntary redundancy as well thats it no mention of it being extra premium or anything

marshallka

tiggrae wrote: »

they cannot have used Rule 78 to calcuate the settlement - can you post the actual figures you received in respect to your settlement - have you started your claim against them - is it for mis selling of the original loan or for the unfair settlement received on early redemption?

How come the settlement is over what was originally borrowed then?? Are you sure that rule 78 was not used. It can still be applied in unregulated agreements can't it??

tiggrae

marshallka wrote: »

How come the settlement is over what was originally borrowed then?? Are you sure that rule 78 was not used. It can still be applied in unregulated agreements can't it??

yes apologies, Rule 78 cannot now be used on Regulated Agreements

marshallka

tiggrae wrote: »

they cannot have used Rule 78 to calcuate the settlement - can you post the actual figures you received in respect to your settlement - have you started your claim against them - is it for mis selling of the original loan or for the unfair settlement received on early redemption?

You know if you make a complaint for unfair settlement is that the same as unfair rebate too or two separate complaints. I have put mine for unfair rebate but have now emailed and asked them to add unfair settlement if they can or is it another complaint??

marshallka

tiggrae wrote: »

yes apologies, Rule 78 cannot now be used on Regulated Agreements

It can still be challenged though under UTCCR as it was an unfair penalty and this is something that the FOS can look into is it not??