PPI Canceling / Reclaiming with Barclays?

dbramley

Hi,
Wonder if anyone can help with a couple of questions on Barclays PPI.

My Mother took out a loan via Barclays for £15,000 over 10 years @ 7.9%. She applied via branch and was told taking PPI out would help her application / she might not get it otherwise as she had no life insurance etc. The PPI has added on around 8k to the loan.

This was two years ago.

Then last year her work closed down and she was out of work for two months until she found her current position.

On the basis of 'Ive got it so might as well use it' she claimed on the PPI insurance to cover her two payments. (We'll ignore the fact Barclays sent someone round to check up on her, had her followed etc. to ensure she wasn't working, thats a different story....)

Where does this leave her now with regard to canceling or reclaiming? I'm working on the assumption that because she has claimed on it, she can't say she was mis-sold (even though she was!)?

What about canceling it? She rang up to ask, the advisor said she would need a new loan, to cut a long story short the interest rate offered shot up from 7.9% to 18.9% and the monthly payment actually increased!

I really need to try and get this monthly amount down for her as she is now struggling financially.

Any ideas welcome, thanks!

Rafter

Over 10 years sounds like a secured loan.

Banks are not allowed to make a loan offer conditional on taking the insurance because they are supposed to be two different products.

The insurance is for her protection, not the banks, particularly if it is a secured loan and therefore the bank has the security of being able to force her to sell the house to repay it.

I don't think making a claim has jeopardised your misselling case, as it relates to an implication that the insurance was compulsory, rather than a pre-existing medical condition or exclusion that wasn't clearly pointed out to you.

On cancellation of PPI, the loan provider is perfectly at liberty to reassess the aplication based on current credit rating and increase the rate.

I'd pursue the misselling case, have a look at a mortgage or other type of financing which might be cheaper than this awful sounding loan.

Good luck

R.