Statute Barred

[alangee]

Does reclaiming unfair charges or PPI restart the SB clock?

Alan

[Never-In-Doubt]

Re: Statute Barred

no. Only written acknowledgement of the debt or payment into the debt resets the SB date

[diddlydee]

Re: Statute Barred

For arguments sake, say the refund of charges or PPI was paid onto the outstanding balance, does that count as a payment?

[Never-In-Doubt]

Re: Statute Barred

For arguments sake, say the refund of charges or PPI was paid onto the outstanding balance, does that count as a payment?

Did you pay it? No.

Hence your answer is - no!

[diddlydee]

Re: Statute Barred

Thank you!

[Diasflac]

Re: Statute Barred

Paying it onto the debt means you wouldn't get the money back though?

[Never-In-Doubt]

Re: Statute Barred

Paying it onto the debt means you wouldn't get the money back though?

Of course but you don't get that option - the lender can offset any refund towards a debt balance - most do, only a few don't.

[alangee]

Re: Statute Barred

Thanks, Niddy.

Alan

[gravytrain]

Re: Statute Barred

Of course but you don't get that option - the lender can offset any refund towards a debt balance - most do, only a few don't.

Yes more on this here how does the ombudsman approach redress where a PPI policy has been mis-sold?

where the consumer has fallen into arrears on their loan or credit card

Sometimes, consumers fall behind with their debt repayments. If they miss their payments for some time, then by the time the business compensates them for the mis-selling of PPI on that debt, the consumer could have some significant arrears.

In these circumstances, businesses often want to use the compensation to remove or reduce the arrears on the account before paying any compensation that remains to the consumer. Whereas consumers usually say they should be paid the compensation so that they can decide whether to reduce the arrears on this debt – or whether to do something else with it, for example, use it to repay other debts.

our approach

What is fair and reasonable will depend on the individual circumstances of the case. But we will first tell the business to identify whether any of the consumer’s arrears relate to the addition of PPI and, if so, to write off those arrears.

We will then consider what it is fair and reasonable for the business to do with any redress left over after it has restructured the consumer’s loan. We will take into account:

the contractual position;
what the law might consider is fair; and
the consumer’s wider financial circumstances.
The FSA’s guidance to businesses handling PPI complaints says that where the consumer’s loan or credit card is in arrears, the business may use the compensation to reduce the consumer’s loan or credit card balance if it has the contractual right to do so.

Some loan and credit card contracts do include provision for this, but based on the cases we have seen, many do not. Where a contract does not include this provision, we take the view that this does not necessarily mean a business does not have the right to use some of the consumer’s compensation to deal with their arrears. In these situations, we will consider the wider legal position.

We take into account the law, which allows people to “set off” closely connected debts. This means that one person (A) can deduct from a debt that they owe another person (B), money which that person (B) owes to them (some businesses also refer to the “banker’s right of set off”, which is simply an expression of the legal right of set off – which may or may not apply depending on the circumstances).

We often decide that it is fair for the business to “set off” the compensation payable for the mis-sale of a PPI policy against the consumer’s arrears on their account – and remove or reduce those arrears. But we would not consider it fair for a business to require the consumer to reduce the balance below what would be outstanding now if the PPI had not been added.

However, if the business that sold the PPI (and is now compensating the consumer) is not the lender, none of these considerations will apply and the compensation should be paid to the consumer as normal.

There may be other circumstances where we might decide that a business should pay all of the compensation to the consumer. We might decide to do this, for example, where the consumer is able to demonstrate to us that they have arrears on other debts that are more serious or that pose a greater threat to them than the debt to which the PPI is attached. Another example might be where the consumer is able to show us that the other debts came about because they were paying the PPI on this debt.