I have been made an offer to settle a PPI mis-selling claim, should I accept?

saints1fan

Hi

I recently wrote to Freedom Finance to complain about about a PPI policy I was sold along side a secured loan. I used the template from MoneySavingExpert and 12 days later I received an offer for £2,000.

The query I have is that I was a little surprised to receive and offer so fast. The policy I was sold had a premium of £7,347 plus interest and the offer letter I received states that Freedom Finance do not agree that I was mis-sold the policy, but "it could be argued that the verbal explaination of the full cost of the policy could have been better and in recognition of this we are pleased to offer you as a gesture of good will £2,000 in full and final settlement."

The letter goes on to say that if I take it to the ombudsman it will take upto 6 months.

The offer was very fast, does this mean that they just want to get rid of me, as I have a valid claim and the ombudsman would award more?

I asked for copies of all documents held on my file and also transcripts or recordings of the telephone conversations held between us. They did not seld these, should I try to get hold of them before making a decision?

Any advice is really appreciated.

homer_j_3

I would not accept the offer.

fuzzgun19

I suppose it depends how much you need £2k now.

Personally I would not accept this offer as it is so short of the actual figure, and they are just trying to fob you off.
I have just had word from the ombudsman re my PPI claim, and they came to the decision I have been missold. It has taken 9 months from beginning to end, but worth fighting for in my opinion.

Good luck!

saints1fan

Thanks for the feedback. I thought that by them offering me £2,000 so quickly, they must think that I have a valid claim, or they would have just declined my claim all together. Is it possible that they may make me an increased offer, as I would probably settle for £4,000?

petermb_2

You are likely to be able to void the entire loan by the sounds of it, which is perhaps why an offer has come to you so quickly. Whatever you do, do not sign full and final settlement. This would prevent you going back at a later date for the rest of your money.

saints1fan

Hi

Thanks petermb for your feedback. I was wondering what you meant by being able to void the entire loan?

By the way I turned down the offer and asked them to think again.

homer_j_3

What peter meant is that if your loan is deemed as voidable because the lender has broken UK law in making the loan, then your loan becomes a pure debt.

So if you had a loan of 15k and PPI of 5k on top of it. Your total loan would be 20k. If that loan was deemed voidable, the recourse of this would be:

The loan becomes pure debt and NO interest can be charged upon it. The PPI would be refunded and any repayments made would go towards reducing the capital of the debt.

So if you had made 24 months of £300 on the above loan, it would work as follows:

20K - 5 K = 15K.

300 X 24 = 7200

15000 - 7200 = 7800 DEBT.

From this point your £300 would reduce the debt by £300 each month rather than a portion of this and the rest paying the interest. So 12 months from the time of this, you will have paid a further 3600 and your debt would be £4200

saints1fan

Hi

I have had another letter from Freedom Finance increasing their offer to £2,500. They still haven't sent copies of their files and transcipts of the telephone conversations and have asked for a fee to do so. I think that I am still under the impression that they would not have made an offer if their weren't in the wrong. What do you guys think?

I am tempted to go back to them with a figure I will accept, to save the hastle of going to the ombudsman. Do you think they would go for it?

Cheers

saints1fan

Hi again

One thing I forgot to mention, was that one of the main points for making the claim was that the policy sold to me, only covered us for 5 year, where as the loan was for 10. Does this automatically mean that I was miss-sold, as if so, I will tell Freedom to get stuffed?

Thanks

homer_j_3

The product structure in itself does not make it a mis-sale. If you were made aware of the consequences then you may be told that it was sold correctly.

You can try and negotiate, the worst they can say is no but if you know they are wrong, I would look to ensure you do not let them get away with it.

in2deep_2

I have been reading this with interest,
I don't want to hijack the OP's thread but i have a quick question
How does this mis-selling thing work if you ONLY had contact via filling in an online form then signing the posted agreement.
I have a loan with northern rock and have NEVER spoken to a single person from NR not even when setting it up, it was all on the Internet.