Hi Im MattyA - PPI applied to default charges?

[MattyA]

Re: Hi Im MattyA - PPI applied to default charges?

Many, have reclaimed the contractual rate of interest that had been applied, as well as the county court Act rate @ 8%:snowbal:
However the wise, would have included the contractual rate of interest that had been applied by the firm within their claim. And then at the end of their claim form added on the county court act rate of interest @ 8% accruing.

Oh, we know that the Bank's don't like it. But, they took the money, applied interest to same and if they do not refund ALL, you will be out of pocket; never get back all your money:santa2::santa1:

Hi Angry Cat & all- have got myself in a mess/confused with this lot & have been re - reading through all posts and replys.
Do you mean that the 'wise' would add the charge and the interest applied by the lender together to create a total charge made by the lender - which then goes in the spreadsheet to which the compensatory 8% is added.?
Matty

[Bill-K]

Re: Hi Im MattyA - PPI applied to default charges?

If that is what AC is saying, Matty, then that is what I recommend, as that is accepted by the FSA & FOS., ie:-
1. The PPI charges;
2. Any other charges which would not have been made if the PPI had not been sold;
3. The portion of account interest directly attributable to the above charges, which was debited by the lender (at the Contractual rate);
4. Compensatory interest at the Statutory rate of 8% simple interest on EACH of the above items, calculated from the date of EACH debit.

Item 4 is the controversial one. If the rate of compensatory interest is higher than the 8% Statutory rate (eg., at the Contractual rate) - then it will not normally be supported by the FSA/FOS, and it will also usually be vigorously opposed by the lender, necessitating court action.

The banks have successfully used a number of arguments in the past, making such claims more difficult for the borrowers to win. One such argument I believe was that the banks can justify charging a higher rate of interest than the Statutory rate we can claim, because they have corporative responsibilities, liabilities and costs which us as private individuals do not. Thus, the ‘mutuality and reciprocity’ argument has often failed – sauce for the goose may not necessarily be sauce for the gander.

It is good to see someone like Alex Woods still considering this contractual rate, but as he implies, it is not an easy argument to win these days.

I would say that you have to decide whether to rely on the FOS guidelines to support your claim, or on your own argument to support a claim for contractual rate instead of Statutory.

A further third suggestion I personally have is to show you are prepared to be reasonable in accepting that contractual rate may not be a fair rate to claim, but suggest that it is similarly unreasonable to set the Compensatory interest at just a paltry 8% simple interest. At the very least, I consider it fair to ask for it to be calculated using the ‘Contractual’ method of compounding, at the very least. And perhaps setting a percentage rate midway between 8% and the contractual rate. That seems fair and reasonable to me.

[Angry Cat]

Re: Hi Im MattyA - PPI applied to default charges?

[Quote by AC:
...the wise, would have included the contractual rate of interest that had been applied by the firm within their claim.[Quote]

To clarify, the interest applied to each and every PPI premium (or charge) applied; from the date of same accruing.

The amount owing calculated; is one's money claim.

And yes BK, the firm may well balk at the request of s69 County Courts Act 8%, also.

Feint heart, never one the day.

[Bill-K]

Re: Hi Im MattyA - PPI applied to default charges?

They don't usually baulk at the 8% Statutory rate, AC - it's if we claim the Contractual rate instead of Statutory that we meet stiff opposition.

[pompeyfaith]

Re: Hi Im MattyA - PPI applied to default charges?

They don't usually baulk at the 8% Statutory rate, AC - it's if we claim the Contractual rate instead of Statutory that we meet stiff opposition.

And that Bill I find hard to understand because if the contractual rate had been charged surely it is a part of putting the consumer back in the position they should be in.

Furthermore if the money was taken under a financial mistake what gives them the right to keep the contractual interest.

[Bill-K]

Re: Hi Im MattyA - PPI applied to default charges?

There still seems to confusion with this, guys.
The interest which has been debited to our account - at the contractual rate - is indeed the interest which we have been charged, and is refundable under FOS guidelines. No argument there.

The controversial argument is when we try and charge THEM contractual interest, INSTEAD of the 8% Statutory interest prescribed by the FOS. This is not interest which we have been charged - this is interest which WE charge the LENDER for depriving us of the use of the money we were charged by them for the PPI. It is a CHARGE which WE make, as compensation for loss of use of that money. The argument is with the rate we use for charging this compensatory interest.

In the opinion of many - including myself - 8% simple interest is derisory, and I believe a higher rate is justified - and that it should be compounded. However, there is an argument that charging the full contractual rate is unfair - and I accept this argument to some extent.

[pompeyfaith]

Re: Hi Im MattyA - PPI applied to default charges?

Bill,

Thanks for putting me straight, understood now and I agree with what you are saying

[MattyA]

Re: Hi Im MattyA - PPI applied to default charges?

Me too.

Thanks everyone for your comments.
I am going to look to be reasonable,in the hope that the claims are settled without the need for court the associated expense , which may wipe out any additional monies due by claiming CI.

[millymollymoo]

Re: Hi Im MattyA - PPI applied to default charges?

Subbing how did you get on btw. I have been offered the premiums + 8% stat which I will accept in part payment as have a duty to mitigate, however will write back reiterating why the contractual ( debited interest ) should be paid instead

Millyx

[charitynjw]

Re: Hi Im MattyA - PPI applied to default charges?

There still seems to confusion with this, guys.
The interest which has been debited to our account - at the contractual rate - is indeed the interest which we have been charged, and is refundable under FOS guidelines. No argument there.

The controversial argument is when we try and charge THEM contractual interest, INSTEAD of the 8% Statutory interest prescribed by the FOS. This is not interest which we have been charged - this is interest which WE charge the LENDER for depriving us of the use of the money we were charged by them for the PPI. It is a CHARGE which WE make, as compensation for loss of use of that money. The argument is with the rate we use for charging this compensatory interest.

In the opinion of many - including myself - 8% simple interest is derisory, and I believe a higher rate is justified - and that it should be compounded. However, there is an argument that charging the full contractual rate is unfair - and I accept this argument to some extent.

Hi Bill,

I'm sure I read somewhere that if the claim is a complex issue, it might be more than a 'small claims' court can cope with (amazing what you can get from the Beano, ennit! lol)
Ps, did anyone mention a letter to you?........

[millymollymoo]

Re: Hi Im MattyA - PPI applied to default charges?

It's probably worth taking to the ombudsman them as they make the credit card companies restructure the whole agreement as though the premium and / or charge wasn't there and I guess the interest they are told to give back is the extra they charged ( well that's what I read on their site ) then 8 % simple is on that amount sobsef more than what they offered . I must admit citi have said more interest is possibly due


Good luck !

[MattyA]

Re: Hi Im MattyA - PPI applied to default charges?

Subbing how did you get on btw. I have been offered the premiums + 8% stat which I will accept in part payment as have a duty to mitigate, however will write back reiterating why the contractual ( debited interest ) should be paid instead

Millyx

Hi Milly - All are ongoing at various stages. Some with FOS some not _ but more importantly no payout yet.
Amex ,whilst my claim was upheld by FOS would not repay the interest added to the PPI - so this is now with ombudsman.

How have you got on?

Matty