interest

[banksaretwats]

Hi,

Whats the current thoughts on what type of interest to use when reclaiming charges.

Cheers

[MIKE770]

Re: interest

Hi,

Whats the current thoughts on what type of interest to use when reclaiming charges.

Cheers

Compound interest, see spreadsheets for this, if problem finding go to Budgies threads and you will find spreadsheets to upload

[Bill-K]

Re: interest

IMO, this depends on what interest you are talking about - and perhaps on what charges you are reclaiming.

The account interest which has been debited can usually be reclaimed, and this is usually charged and calculated as compound interest. But it doesn't really matter, because whatever you were charged is whatever you reclaim - whether it was simple, compound, or Vulcan. If they charged you £1.50 back in May 1984, then that's what they charged you - it doesn't matter how they calculated it. It's the £1.50 you need to focus on - not the way it was calculated.

BUT - the 'Compensatory Interest' which we can claim does often need to be clarified, because we DO need to establish a rate and method. To claim this at the 'Contractual' rate is not an easy task, and is not a path I recommend these days. I always suggest that this is claimed at the 'Statutory' rate, which is 8% p.a. simple interest. It is the method backed by the FSA & FOS.

[banksaretwats]

Re: interest

Compound interest, see spreadsheets for this, if problem finding go to Budgies threads and you will find spreadsheets to upload

Hi,

I have read through Budgies exploits with interest & was wondering if it was any easier these days as I dont have Budgies comprehensive understanding on this subject.

Thank you in anticipation for your comments.

Cheers

[banksaretwats]

Re: interest

IMO, this depends on what interest you are talking about - and perhaps on what charges you are reclaiming.

The account interest which has been debited can usually be reclaimed, and this is usually charged and calculated as compound interest. But it doesn't really matter, because whatever you were charged is whatever you reclaim - whether it was simple, compound, or Vulcan. If they charged you £1.50 back in May 1984, then that's what they charged you - it doesn't matter how they calculated it. It's the £1.50 you need to focus on - not the way it was calculated.

BUT - the 'Compensatory Interest' which we can claim does often need to be clarified, because we DO need to establish a rate and method. To claim this at the 'Contractual' rate is not an easy task, and is not a path I recommend these days. I always suggest that this is claimed at the 'Statutory' rate, which is 8% p.a. simple interest. It is the method backed by the FSA & FOS.

Hi

I was thinking about credit card charges, & getting charged interest on those charges specifically. 8% would be,at best, half of what was being charged on your charges.

Thanks for all your input.

Cheers

[MIKE770]

Re: interest

8% is usually added if at court stage, the norm has been to claim interest as has been charged to you hence compound interest.
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You could PM Budgie for more info, he is very helpful.

[banksaretwats]

Re: interest

8% is usually added if at court stage, the norm has been to claim interest as has been charged to you hence compound interest.
------------------------------- merged -------------------------------
You could PM Budgie for more info, he is very helpful.

Hi

Not at court stage yet, just waiting for all the info to come back. I was wondering, when I get all my info back & work out all the charges that have been applied to my account & am ready to send a letter to the company, should I use simple interest or the fairer (in my eyes anyway) compound.

Thanks in anticipation.

Cheers

[Bill-K]

Re: interest

First of all, are you just reclaiming penalty charges or PPI ? If you were charged PPI, then that would be well worth investigating, first. If you are just reclaiming penalty charges, then you should be aware that this may involve court litigation, and you will need to understand what you are claiming, and why.

If you were charged £500 in penalties, then you may be able to reclaim them - or you may be able to reclaim some of them - or you may have to fight tooth and claw. Whatever it is that you end up claiming - or being offered - you can then also reclaim the portion of account interest that was directly attributable to those charges (whether they were PPI or penatlies). It doesn't matter what method was used to calculate that interest. What you were charged is what you were charged, and you reclaim the portion of that which pertains to the accumulated charges included in your ongoing monthly balance.

Once you have got all that sorted out, you can then apply Compensatory interest, which DOES depend on method and rate. It CAN be claimed before taking a claim to court, but in the end it IS the courts that award it, if you have to take your claim that far. You do need to be clear about these two different types of interest, though, and the difference between them. It confuses many people.

As Mike says, though, give Budgie a PM, perhaps. I'm sure he'd be pleased that you found his threads helpful.