MBNA PPI question

[ken100464]

Quite a specific question on a refund of PPI.

We have an offer which is broken down into 3 parts.

Refund of Premiums. Our transaction paperwork agrees with MBNA's total
Interest. This sum equates to within £6 to all the overlimit fees.
These of course would not have occurred the longer the PPI was in place.
8%. This equates to 8% interest on both the two above sums added together.

My question is simply what is the interest rate that should be used on the refund of premiums and charges.

The card rate was 22.9% but was increased to 34.9%

The paperwork they have sent with the cheque just says 8% interest and that is it.

I do not have full statements so cannot reconstruct the account but have got transactions all the way back to 2001 which has surprised us.

Thanks

[vossy]

Re: MBNA PPI question

I am not sure on the rest but I think the 8% is statutory interest that the courts would have awarded if it had got that far, Di is the expert and will know more than me.

[di30]

Re: MBNA PPI question

Hiya

Well done on your offer.
The FOS explains how they would award ppi refund on both credit card ppi and loan ppi as below, so hope this gives you an idea.
I understand it differs from loan to credit card ppi in regards of the interest......


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).

[ken100464]

Re: MBNA PPI question

Cheers Vossy.

Thats what is confusing me because people talk about contractual interest on the refund portion of the claim then 8% on any money when your account is in credit. (I wish lol)

And suppose that makes sense because they have been charging the card rate on the PPI and the charges. If they hadnt been there then there would have been no interest at 22.9% let alone 34.9%

It was easy for my Halifax reclaim as I had the statements so could do a full reconstruction

[ken100464]

Re: MBNA PPI question

Di

This account was sold on with a balance on it. PPI was cancelled a year before but ran from 2001 so would say this is a closed account with PPI cancelled.

So the interest on the premiums and charges should be?????? 22.9% or 34.9% but certainly not 8%?

[di30]

Re: MBNA PPI question

Sorry for the delay in getting back to you, was just checking both mine and hubby's credit card refund of the PPI.

Just like yours, it is also the usual standard 8%.

So what they should refund you is what you have paid to cancellation, the total monthly interest on top of the monthly ppi paid, plus 8% interest what the court would normally award.

[di30]

Re: MBNA PPI question

I'm sure when they work on refunds, it is worked out differently to loan ppi.
They do not - or did not use the % as what was shown on our paperwork agreement.

I will take a browse around elsewhere to make sure as well.

[ken100464]

Re: MBNA PPI question

Di

Thats how I read it too and therefore 8% on the premiums and charges isnt right.

Hmmmmm interesting. If I use 34.9% it almost doubles what they have actually paid out.

I cant reconstruct fully so am slightly on a whim to them but I reckon a request to get them to justify each premium and what contractual interest rate they have been using is in order here.

Is this something FOS would expect them to do if we are unhappy with what they have given us?

I have a sick feeling on this one for reasons I keep coming back to.

[di30]

Re: MBNA PPI question

Di

Thats how I read it too and therefore 8% on the premiums and charges isnt right.

Hmmmmm interesting. If I use 34.9% it almost doubles what they have actually paid out.

I cant reconstruct fully so am slightly on a whim to them but I reckon a request to get them to justify each premium and what contractual interest rate they have been using is in order here.

Is this something FOS would expect them to do if we are unhappy with what they have given us?

I have a sick feeling on this one for reasons I keep coming back to.

What I would do, and it's what you are entitled to do, is contact/write to them and ask them to provide you with a more detailed breakdown, because often the ones they send are not fully detailed, this should also explain what interest they did include.

If I was feeling like you do, then I would certainly be raising it up with them, you have a right to do so, as it's your money.

The FOS will expect them to calculate the way they do within the FOS, as posted in the above post, but if anything is amiss, they will pick up on it (calculations) and make sure its put right.

[di30]

Re: MBNA PPI question

I think they have a law of their own in my opinion, and they do what they want to do, so I would be inclined to double check and ask for a full detailed written breakdown on each monthy repayment, of how they calculated your refund x

[ken100464]

Re: MBNA PPI question

Actually I could be quite mad on this.

This is the account that they secured a CCJ and a CO.

There are £460 overlimits. £1600 of PPI. With the interest they give its £2700.

The CCJ was for £2600.

If the 22.9% interest is actually applicable this could be a reclaim of £8000.

Thats just mad aint it.

And in the SAR they state the that if there is no copy of the original CCA enclosed then its because they no longer hold this data.

Guess what no copy in the SAR. So no CCA either.

Bloody hell talk about banksters or what.

[ken100464]

Re: MBNA PPI question

Lol and the court costs were nearly £500.

Jeez glad I got a sense of humour on this one.

[di30]

Re: MBNA PPI question

Just write a short letter, for example............


Dear Sir/Madam

Account Ref Number *******

I received an offer from you on your letter dated X/XX/12, you have included basic details of how you calculated the refund due to me.

I do find how you calculated the interest in relation to the account rather confusing, and now requesting that you send me a full detailed written breakdown of how you calculated each monthly payment, including the interest it attracted on each payment made from when the account was opened - to cancellation.

I understand I have a right to request for the details of my account, and will be grateful if you can send me a detailed copy in the post over the next few days.



Yours faithfully

[di30]

Re: MBNA PPI question

Actually I could be quite mad on this.

This is the account that they secured a CCJ and a CO.

There are £460 overlimits. £1600 of PPI. With the interest they give its £2700.

The CCJ was for £2600.

If the 22.9% interest is actually applicable this could be a reclaim of £8000.

Thats just mad aint it.

And in the SAR they state the that if there is no copy of the original CCA enclosed then its because they no longer hold this data.

Guess what no copy in the SAR. So no CCA either.

Bloody hell talk about banksters or what.

Wow, yes your right!

[di30]

Re: MBNA PPI question

Lol and the court costs were nearly £500.

Jeez glad I got a sense of humour on this one.

Crikey, it all adds up!

Having a GSOH helps you to get through this lol.