Lloyds TSB PPI

[spencer47]

I recently made a PPI claim against Lloyds TSB on behalf of my sister. She has today received an offer of £4,145.24. This consists of an amount of:

1) £4108.38 PPI premiums paid(adjusted for interest).
2) £38.36 interest(8% simple interest when your account was in credit).

There is no breakdown on the PPI premiums or seemingly any offer of statutory interest on the premiums paid. The letter goes on to say that the FOS only requires them to interest on credit balances at 8%. We are unsure whether to accept this offer or query it. Any advice would be appreciated.

[di30]

Re: Lloyds TSB PPI

I recently made a PPI claim against Lloyds TSB on behalf of my sister. She has today received an offer of £4,145.24. This consists of an amount of:

1) £4108.38 PPI premiums paid(adjusted for interest).
2) £38.36 interest(8% simple interest when your account was in credit).

There is no breakdown on the PPI premiums or seemingly any offer of statutory interest on the premiums paid. The letter goes on to say that the FOS only requires them to interest on credit balances at 8%. We are unsure whether to accept this offer or query it. Any advice would be appreciated.

Hi there

If they uphold a complaint, they should rightfully follow the same guidelines, the same way the FOS calculates, so is this a credit card ppi reclaim?

I am aware it differs from that to loan ppi, below is some useful info on how the FOS calculates.
I would contact the bank and ask them to provide a full detailed breakdown of how they calculated the refund, so you can see where ppi and the interest came into it.

So again, if they uphold, they should pay all ppi paid to the account, plus the relevant interest to what is relevant to that account itself, as it varies from credit card to loan ppi, hope that makes sense, but do also read the below for more details.

Well done on your great work and Congratulations to your sister on her success!.


CREDIT CARDS

1. Where card account and the PPI are still in force.

If the consumer agrees to cancellation of the PPI the financial business should:

a) reconstruct the account by removing any premiums in respect of the PPI and any interest or charges in respect of those premiums;
b) if that produces a credit balance for any period, credit interest on that balance for that period at 8% simple per year; and
c) send the customer a statement showing the resulting balance on the account (with details of how it was calculated).

2. Where the card account is still open but the PPI has been cancelled.

The financial business should:

a) reconstruct the account by removing any premiums in respect of the PPI and any interest or charges in respect of those premiums;
b) if that produces a credit balance for any period, credit interest on that balance for that period at 8% simple per year; and
c) send the customer a statement showing the resulting balance on the account (with details of how it was calculated.)

3. Where the card account has been cleared and closed and the PPI has been cancelled:

The financial business should:

a) reconstruct the account by removing any premiums in respect of the PPI and any interest or charges in respect of those premiums;
b) if that produces a credit balance for any period, credit interest on that balance for that period at 8% simple per year;
c) pay the customer the difference between the revised closing balance and the original closing balance;
d) pay the customer interest on that difference at 8% simple per year from the date of closure to the date of payment; and
e) send the customer details of how the revised balance, the difference and the interest were calculated.

FOS may also consider it appropriate for the financial business to pay the consumer additional compensation for any distress and inconvenience he or she has been caused, including where the financial business rejected a complaint which it knew (or should have known) would be upheld, If they consider such an award is appropriate this will be specified by the adjudicator.

LOANS

These are examples full publication can be found on Link following them


Loan and PPI policy still in place at time of FOS decision.
Lender agreed for the cancellation of the PPI policy and restructuring of loan. E.g.
Overall loan repayments £250 per month but would have been £200 without PPI, term of policy was 60 months and complaint settled after 20 monthly payments.
· Return excess monthly payments of £50 x 20 payments up to date of settlement (£1000)
· Add interest to each payment of £50 at 8%simple, from date of each payment until lender repaid.
· Arrange loan to be restructured, so remaining 40 monthly payments reduced to £200
· Pay borrower £300 for extra inconvenience caused.

Loan and PPI policy terminated early before FOS decision.
Overall loan was for £23,000 (monthly payments £430) – but it would have been £18,000 with monthly payments of £340 without PPI. Policy term was 60 months; loan and policy cancelled are 23 monthly payments.
Borrower was required to pay £15,500 to settle the loan (after the business had taken account of the rebate of premium he was due of £1,200; but if he had not had PPI added to loan, the smaller loan of £18,000 would have cost £13,000 to settle at the same point.
So borrower had paid lender £90 a month more than he would have done, had the financial business not mis-sold the PPI policy; and £2,500 more to settle the loan after 24 months.
· Return 24 monthly payments of £90 to date of settlement (£2,160)
· Calculate difference between settlement costs incurred when borrower ended loan early and those he would have incurred had he settled the loan without the additional PPI element. (£15,500 - £13,000 = £2,500) pay difference to borrower.
· Add interest to each payment of £90 at 8% simple, from date that excess was incurred.
· Pay borrower £400 for extra inconvenience.

Loan and PPI policy ran to term before FOS decision
Overall loan was £7,500 (monthly repayments of £250) – but it would have been £6,000 with monthly repayments of £200 without PPI. Term of Loan and policy 36 months. So borrower had paid £50 more per month than if PPI not been mis-sold.
· Return £50 x 36 months of the loan (£1,800)
· Add interest to each excess payment of £50 at 8% simple, from date that excess was incurred.
· Pay £200 for extra inconvenience.


SUCCESSIVE SINGLE-PREMIUM PAYMENT PROTECTION INSURANCE

The exact approach to calculating compensation will depend on the overall circumstances of the individual complaint. In particular the calculations of compensation will vary according to the present status of the most recent loan and PPI policy. The financial business will be expected to consider the four scenarios set out below to ensure that the calculations are appropriate.

1. the most recent loan and the most recent PPI policy are still in force;
2. the most recent loan is still in force but the most recent PPI has been cancelled or has expired;
3. all the loans have been settled early and all the PPI has been cancelled;
4. the most recent loan and the most recent PPI policy have run the full term.

plus also additional compensation for any distress/inconvenience including where the financial business reflected a complaint which if knew (or should have known) FOS would uphold.

Subject to the consumer agreeing to cancel any PPI policy that was mis-sold and is stillin force the financial business should:

(A). In respect of each loan:
- recalculate the loan and the payments to what they would have been if the consumer had taken the loan without PPI
- repay to the consumer the amounts by which the payments actually made exceeded the recalculated payments;
- pay the consumer interest on each of these amounts at 8% per year simple from the date each payment was made to the date the compensation is paid;
- recalculate the balance that would have been outstanding at the end of each loan had the recalculated loan not included PPI.

(B) Calculate how much of the balance that was carried forward to the subsequent loan related to the cost of the PPI policy taken out for the previous loan: and
- repay to the consumer all amounts paid under each subsequent loan in respect of the carried forward balance, including interest and charges;
- pay the consumer interest on each of these amounts at 8% per year simple from the date each payment was made to the date the compensation is paid.

(C) Where the most recent loan is still in force and it includes the cost of the most recent PPI policy and/or any balance carried forward from the cost of previous
PPI Policies, the financial business should restructure the loan or arrange for the loan to be restructured so that the balance is reduced to the level that it would
have been if it had not included any of the costs of the mis-sold PPI policies.

(D) Set out in writing for the consumer details of the calculations under (A) (B) and (C).

[spencer47]

Re: Lloyds TSB PPI

Di

This is a credit card. My sister ran into financial difficulties and asked to me to help her with her financial affairs in January this year. I wrote to her creditors and Lloyds TSB agreed to accept £1 per month on this account. I noticed she PPI on this account and cancelled the premium. She owes about £4.5K on this account so the premium was about £35 per month. The policy was entirely useless to her. I complained as she has a long standing illness which I thought gave her good case for misselling. Surprisingly they agree but don't trust these people.

From reading the guidelines it appears that they don't have to pay interest on the PPI premiums for a credit card but they would do if it had been a loan. Is this your understanding? Don't really understand why as you have still been deprived of the money in both cases.

[di30]

Re: Lloyds TSB PPI

Di

This is a credit card. My sister ran into financial difficulties and asked to me to help her with her financial affairs in January this year. I wrote to her creditors and Lloyds TSB agreed to accept £1 per month on this account. I noticed she PPI on this account and cancelled the premium. She owes about £4.5K on this account so the premium was about £35 per month. The policy was entirely useless to her. I complained as she has a long standing illness which I thought gave her good case for misselling. Surprisingly they agree but don't trust these people.

From reading the guidelines it appears that they don't have to pay interest on the PPI premiums for a credit card but they would do if it had been a loan. Is this your understanding? Don't really understand why as you have still been deprived of the money in both cases.

Hi Spencer
Did they say if they were going to use the refund towards the debt on the account?

And have they also stopped the charges on the account?
If not I would be asking them to stop them as well, but assume you have already done this, this will then stop the owed payment from rising.

I was once in this situation and going by the letter you received, in regards of the interest that appears to be correct, but you can always contact the calculation team if you want to double check on this, or email them here.....

Customer.Care.Insurance@lloydsTsb.co.uk

ppi.customer.relations@lloydstsb.co.uk

[spencer47]

Re: Lloyds TSB PPI

Di

They have stopped all interest and charges. She had a bank account with them as well. The letter says they are going to transfer to her bank account. Unfortunately that has a £10.5K overdraft on it. Still it all helps.

I have also made a PPI claim on the bank account but the premium on that was only £3.95 per month. In addition we have outstanding PPI claims against Santander, Barclaycard, Freemans and Next. Heartened by this response from TSB so if we can win some or all these it will go a long way to getting her out of debt. I will email them for clarification. Thanks for your help.

[di30]

Re: Lloyds TSB PPI

Di

They have stopped all interest and charges. She had a bank account with them as well. The letter says they are going to transfer to her bank account. Unfortunately that has a £10.5K overdraft on it. Still it all helps.

I have also made a PPI claim on the bank account but the premium on that was only £3.95 per month. In addition we have outstanding PPI claims against Santander, Barclaycard, Freemans and Next. Heartened by this response from TSB so if we can win some or all these it will go a long way to getting her out of debt. I will email them for clarification. Thanks for your help.

Your very welcome Spencer and excellent work too.

I'm sure all will be fine and yes every penny will help.

In regards of any loans (if any), and anything such as a debt balance on them, they normally refund towards the balance, if anything remaining, and the interest of the loan ppi should be refunded directly back to your sister.

Good luck on all reclaiming.