PPI redress confusion

[Bill-K]

Re: PPI redress confusion

MBNA used to just use the highest interest rate applied (non cash rate) for the duration o the account. Obviously they had the same issues.

Are you saying MBNA didnt use the retail rate on PPI?

Oscar may say differently, Ken - but I think he was saying that they DID use the full retail rate. The lower promotional rates were usually only applied to one-off balance transfers, or purchases made during limited promotional periods, etc.

The cash rate was usually only applied to cash advances and/or maybe account cheques, I believe. This was usually calculated at the same % rate as the full retail - but because there was often a fee added for these, then the APR for these was higher - as it included the fees in the cost of the borrowing. I hope I have got that right, but I'm sure Oscar will elucidate later !!!

[tjperfick]

Re: PPI redress confusion

No you should not trust what they are doing at all. You will if you look hard enough find the banks are at it again. But it does need the consumer to get a SAR and have a compliant spreadsheet they can use.

I have got a SAR, but only from the last 6 years. Again that pulls up another query that the amounts do not tally - I mean that I have got that for the last 6 years between the 2 catalogues, I paid in over £7K of ppi,(2007 - 2011) but have only been reimbursed for just over £10K's worth of premiums. The catalogues were running from 1993 and 1998.

[Bill-K]

Re: PPI redress confusion

OK - so it looks like you have done the DSAR thing with these guys, then TJP - good stuff. If any of them are still running, then I do think sending a CCA s.77-79 request is worth doing if you don't have copies of the original agreements (or application forms). Not particularly for 'unenforceability' reasons (although that is always an implied threat, isn't it ?) - but because it will establish when the account was opened, and may even show if the PPI box was ticked at square one.

Now that you already have the admission that the PPI was mis-sold, you are over that hurdle. You can now use that ticked box to prove that you paid PPI from that date. If you have 6 years of DSAR data, then we should be able to construct an acceptable estimate of what you probably would have paid in PPI from account inception until the first piece of DSAR data you have. But this will involve some time and effort - so be prepared to put some in !!!

Looking at the figures you have posted, you have got data that shows that you paid approx. £7K in PPI over a 4 year period from 2007-2011, but the catalogues were running for a further 9 & 14 years prior to this. Without proof of the dates when the PPI was taken out, we cannot challenge what seems to be their estimate. If you have any copies of any agreements or application forms, then these could be of use here. But it may well be that their own estimate is correct. Remember that we often opened our catalogue accounts with a few small purchases, but these were added to as time went by - so the PPI may well have been much smaller in the earlier years, and £3K may well be correct.

You have got some 'nailed-down' figures for 2007-2011 - and well done, that man !!! But with estimated amounts, we need to try and find dates to work from, and that is why the original agreement helps. Other stuff - such as the T&C's - can help, because the T&C's can often be used to establish a date. But it can be a lot of work, and needs to be thought about beforehand.

[tjperfick]

Re: PPI redress confusion

Cheers Bill, the reclaim forms from shop direct had the dates of 1993 and 1998 on them as the date that the ppi was applied, so I already have the exact dates. The accounts are now shut, but seeing as I already have the dates I don't need a CCA request do I ?

[Bill-K]

Re: PPI redress confusion

Indeedy, TJP. If the accounts are closed, the we would have to use the dates that you have, as I doubt if a CCA Request would give you anything better.

BUT - you would still need to fill in spreadsheets in order to give proper bases for the estimates, I'm afraid...!!!

If you're up for that, then I'll certainly do my best to do the estimates from that, guv'nor.

[oscar]

Re: PPI redress confusion

Are you saying MBNA didnt use the retail rate on PPI?

Oscar may say differently, Ken - but I think he was saying that they DID use the full retail rate. The lower promotional rates were usually only applied to one-off balance transfers, or purchases made during limited promotional periods, etc.

The cash rate was usually only applied to cash advances and/or maybe account cheques, I believe. This was usually calculated at the same % rate as the full retail - but because there was often a fee added for these, then the APR for these was higher - as it included the fees in the cost of the borrowing. I hope I have got that right, but I'm sure Oscar will elucidate later !!!

Ken, as Bill has said, they did use the retail rate, but they didn't go back historically for the older ad usually lower interest rates. For example if the rate was currently 10.9% and used to be 7.9% say three years ago, that was ignored and the 10.9% rate was used to calculate the refund over the said time. That's how it used to be - could well have changed now.

Hope that makes more sense!

[ken100464]

Re: PPI redress confusion

Oscar.

Interesting. On present MBNA redress they clearly are using different rates although I am not sure its the retail rate. Pretty difficult to work that one out. As I have discussed at length with Bill it is always without massive computing power, multi interest rate spreadsheets and the T & C's of your account, going to be difficult to get this entirely correct.

In your example above to use the higher rate for the redress would give the consumer a better deal than using a variable rate over the lifetime of the account. Thats if I understand it right.

[Bill-K]

Re: PPI redress confusion

Yes, that is interesting, isn't it ? I didn't quite grasp that aspect the first time, Oscar. It does seem somewhat out-of-character for MBNA to use just the most recent (and probably highest) interest rate when calculating redress. On the PDF copies of MBNA's redress calcs that I have seen, there are no interest rates shown at all (other than 8% SI & 20% IR Tax) - so it is not possible to check this. As far as we can see, the MBNA calcs cleverly manage to reduce the amount of PPI-apportioned account interest, so their apparent generosity by using the highest rate is actually negated by this - as they effectively reduce the rate down to 8% simple interest for a large portion of the account interest.

I have usually suggested that claimants do their best with whatever limited resources they have, when calculating the redress they expect to be offered because - as Ken says - we just don't have the computing power or data access that the banks have. I believe that we should only be expected to make a reasonable effort with accuracy, and that it is up to the banks to challenge our figures - and to explain theirs. Seeing as we are invariably given very little information or data, then all we can be expected to do is try and make an educated guess with the data & resources that we have. I abandoned the idea of creating multi-rate spreadsheets a while ago for this very reason.

However, working with Ken and others recently, we have needed to be as accurate as possible in order to convince the FOS/FCA that MBNA's calcs are incorrect - so the idea of a multi-rate spready has re-surfaced recently.

[pompeyfaith]

Re: PPI redress confusion

Income tax may not always need to be paid because if this PPI was paid from earnings tax would have already been paid via PAYE If this is the case you are due a refund from hmrc

[ken100464]

Re: PPI redress confusion

Pompey

Yet another interesting thought.

However I would have thought it would be more along the lines of tax payable on your savings. Its only the 8% element that is taxed and this is the element you should only get if they have held onto your wonga when they should not have done. ie when the account was in credit.

That said if you are a nil taxpayer and they have swiped 20% of your 8% interest off you then I totally agree HMRC should be giving you that back.

[Bill-K]

Re: PPI redress confusion

As Ken says, the PPI and its associated account interest are not taxable, PF. It is only the 8% compensatory interest that is taxable. Personally, I don't think tax should be payable on any form of compensation - but that's just my personal view. As Ken also says, if you are a nil taxpayer, then you can reclaim this from the I.R. - but I bet it ain't easy !!!

[oscar]

Re: PPI redress confusion

Ken / Bill,

IF you are able to provide with a calculation sheet, I maybe able to offer some assistance in your quest.

As I say, it is as few years now since I left, but they were never an organisation to embrace change.

[ken100464]

Re: PPI redress confusion

Our problems start from summer 2012. They seemed to be doing something else before then.

[tjperfick]

Re: PPI redress confusion

Indeedy, TJP. If the accounts are closed, the we would have to use the dates that you have, as I doubt if a CCA Request would give you anything better.

BUT - you would still need to fill in spreadsheets in order to give proper bases for the estimates, I'm afraid...!!!

If you're up for that, then I'll certainly do my best to do the estimates from that, guv'nor.

I am up for that, if just to my mind at rest that I have been reimbursed the correct amount of ppi back.
Where do I go from here?
cheers

[tjperfick]

Re: PPI redress confusion

As Ken says, the PPI and its associated account interest are not taxable, PF. It is only the 8% compensatory interest that is taxable. Personally, I don't think tax should be payable on any form of compensation - but that's just my personal view. As Ken also says, if you are a nil taxpayer, then you can reclaim this from the I.R. - but I bet it ain't easy !!!

I received compensatory interest on my CC and also on the store card - should i have received it on catalogues as well?