PPI Statutory compensation taken off previous claim

mum_of_joey · 1 December 2019 at 7:02PM

I have been claiming a refund of PPI from Barclays Bank for a mortgage back in 2004. I have received a refund of £744 for the mis-selling of all the insurance premiums paid as was given the impression that I wouldn't get the mortgage without it. There was no interest charged on the premiums (and thus none refunded).

The letter then states: 'I have deducted any previous claims or refunds you have already received.' I DID receive an amount for redundancy a couple of years after starting payments - it was £3,000, so they have taken the £744 off of that - fair enough..

It THEN states . 'We have included ADDITIONAL interest (the 'statutory interest') of £821 after tax on top of your refund AS COMPENSATION. (The capital letters are mine) .This is paid at the statutory rate of 8%.' They have then DEDUCTED this from my £3,000 also, thus my redundancy award all those years ago has now gone down to £1435.

I can see that the £744 premiums would be taken off my £3,000 as it refers DIRECTLY to the PPI insurance, but I can't quite see why the £821 ADDITIONAL INTEREST as compensation was taken off. Surely this relates to the 15 years that Barclays has had the use of my money and is not DIRECTLY related to the redundancy payout that I claimed?

I am trying to work out the principle of it all. I appreciate that the repayment of the £744 worth of premiums is to 'put me in the same position as I was before paying for PPI and is fair enough' - though in that case, why are they not claiming back the whole of the £3,000 (not that I want them to, obviously!) - but taking off the SUBSEQUENT compensation of £821 as well just seems a bit odd to me.

Is there anyone with the knowledge of how this works able to put my mind at rest, please? (As opposed to people who think that I should count myself lucky that I got £3,000 at all) - I just want the facts, please. Thank you.

Nearlyold · 1 December 2019 at 9:17PM

The usual method where there has been a payout due to an insured event on a PPI policy is to deduct that payout from any mis-sold return of Premium and Statutory interest that would otherwise be due.

I don't understand why you say they are deducting the mis-sold return of premium and Statutory Interest from the £3,000 you were paid by the policy when you were made redundant. The letter you have states "I have deducted any previous claims or refunds you have already received.' which is the opposite of what you are saying.

To my mind if the total mis-sold compo should be £744+£821 = £1565 but you have already received £3,000 from your redundancy claim then the total payment due to you now would be £0 but they don't ask for the £1435 back. If I'm right I would hazard a guess that they have only "upheld" your complaint because they don't have to pay you anything.

Have they actually paid you a refund?

mum_of_joey · 2 December 2019 at 2:21AM

I may not have worded it very well, as what I meant is that they have adjusted the premiums (£744) and the Statutory compensation (£821) on the £3,000 that I received 13 years ago, leaving me with a MINUS figure of £1435. I didn't expect them to ask for that back.

They haven't paid me a refund, just adjusted it.

The point I was trying to make was that it just seemed odd that the Statutory compensation (the £821) should be adjusted on the £3,000 as I thought that this doesn't relate directly to the redundancy payment that I received, which the premiums DID, and was just that - compensation for the use of my money over the 15 years they have had it, Perhaps I am being naive.

A good point about them perhaps only 'upholding' my complaint because they wouldn't have to pay out.

Thank you for answering, anyway.

[Deleted User] · 2 December 2019 at 6:50AM

It all seems correct. They're deducting the value of your claim from your redress (not the other way round).

That includes the values of the statutory interest, but they won't charge you the same interest on the money of theirs that you have held.

As long as you didn't use a claims company, you won't have to pay out for the complaint.

[Deleted User] · 2 December 2019 at 8:11AM

mum_of_joey wrote: »

my redundancy award all those years ago has now gone down to £1435.

That is not the way to look at it at all.
You still received a sum of £3000 when you claimed on the insurance, but you can't truly expect to receive a full refund of the PPI premiums you paid on top of that? As it stands you've already received far more than you actually contributed.
You made a complaint that the insurance was mis-sold you, but your complaint was terminally weakened by the fact that you claimed on the insurance and received a payout. As already advised, the Bank will therefore only be upholding your "complaint" because doing so improves their complaint statistics without actually paying you anything.

I do hope you didn't complain using a Claim Company as, if you did, they'll still want their percentage of your award despite you actually receiving nothing.

mum_of_joey · 2 December 2019 at 7:49PM

Well, I did receive a refund of the PPI premiums but obviously this has been offset by what I received when I became redundant. The whole point of my enquiry was to question what the Statutory compensation of 8% was related to. I wasn't trying to get away with having everything refunded - It seemed to imply that this aspect was not connected to the actual insurance policy but was 'compensation' for the fact that they had messed up as obviously this is an amount that has not been calculated until now.

Yes, I received £3,000, but like every other insurance, that is the chance that the insurance company takes, I just wanted to confirm that what they are telling me is correct (ie that the Statutory compensation should be adjusted on my previous payout). Even large companies can get it wrong and there is no harm in checking.

I didn't use a claims firm to do this, so should be OK. Thanks for answering, everyone.

[Deleted User] · 2 December 2019 at 7:56PM

mum_of_joey wrote: »

Yes, I received £3,000, but like every other insurance, that is the chance that the insurance company takes

Well indeed, but that's because the policy performed as it was supposed to.

Your complaint of it not being appropriate means that there is no statutory interest to be applied, because in net terms, you've had their money, rather than them having yours.

The interest is compensation for deprivation of funds, which doesn't apply in your case.

[Deleted User] · 2 December 2019 at 8:02PM

mum_of_joey wrote: »

Yes, I received £3,000, but like every other insurance, that is the chance that the insurance company takes

The point is that you complained that an insurance you had claimed upon (and so benefitted from) was somehow mis-sold.
How was it mis-sold?

The insurance successfully covered the very eventuality it was designed to protect you against.

PPI Statutory compensation taken off previous claim

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