Egg Mis-sold me a Top-Up Loan

I'm new to this forum so pls bear with me. If I've posted in the wrong forum p'haps a site member can help.

Anyways, I've been running this on CAG with no real joy.

My situation is as follows:

In 2004 I took out an Egg Card and Loan. The card had monthly PPI and the loan had single premium PPI.

Egg then flogged me a Top Up loan to "consolidate" the card and the loan.

The PPI payments on the card amnounted to 9.5% of the final credit balance and the single premium on the loan was approx 20% of the total balance.

The Top Up Loan has no PPI and I have therefore been paying the capitalised element of PPI from 2 previous credit accounts plus intereszt for 5 years.

To add insult to injury Egg defaulted the Top Up Loan and the default sum is made up of the mix of PPI. Egg have refused to remove or adjust the default to an accurate figure.

The card agreement was the typical "approved" limit type and contained no credit limit figure

The loan agreement did not tell me what the interest breakdown was on the principle loan and PPI. Just gave me a global fixed monthly premium and it is clear they added APR to the single premium PPI
Any suggestions?

[The Debt Star]

Re: Egg Mis-sold me a Top-Up Loan

Anyone any views on this? Is it a dumb thread or maybe too involved etc?

[leclerc]

Re: Egg Mis-sold me a Top-Up Loan

Have you reclaimed the PPI on the closed account?

[The Debt Star]

Re: Egg Mis-sold me a Top-Up Loan

Hi leclerc. Good to hear from you.
No, not yet. What I have done is complete the FOS PPI claim forms (2 of them; 1 for the old card and 1 for the old loan).
I have posted one set of the PPI claim forms to Egg and one set to the FOS. I have also complained about the PPIs in the FOS claim form.
Oh, and I wrote to Egg about the PPI but as always they just ignore correspondence unless it suits them.

[leclerc]

Re: Egg Mis-sold me a Top-Up Loan

Remember with the FOS and PPI that the lender has 56 days to respond or you can go to the FOS but it is important that they respond promptly.
Hmmm, I have just had an idea but will run it through someone firstly.....

[The Debt Star]

Re: Egg Mis-sold me a Top-Up Loan

Hmmm, I have just had an idea but will run it through someone firstly.....

Yes please leclerc. Look forward to hearing from you.
TDS

[Guest]

Re: Egg Mis-sold me a Top-Up Loan

Hi

On your top up loan

was the restricted part (the one to pay your old loans) itemised on your agreement ie totla credit made up of etc beter still could i have a look

Peter

[Guest]

Re: Egg Mis-sold me a Top-Up Loan

THinking about this

The figure given for the top up would have been quite badly out wouldnt it.

The amount you were required to borrow to clear the old debt would be unreasonably high.
Sounds like maybe section140 territory.

Anyway lets have a look at the top up agreement and see what we can come up with
Peter

[The Debt Star]

Re: Egg Mis-sold me a Top-Up Loan

Hi.
Here is the Top Up CCA.
Cheers.

[The Debt Star]

Re: Egg Mis-sold me a Top-Up Loan

The agreement looks larger scale on these links
http://i822.photobucket.com/albums/z...1/1cd62cba.png

http://i822.photobucket.com/albums/z...1/58c6f7b3.png
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Hi

On your top up loan

was the restricted part (the one to pay your old loans) itemised on your agreement ie totla credit made up of etc beter still could i have a look

Peter

No. Nothing itemised on the Top Up consolidation CCA

[Amethyst]

Re: Egg Mis-sold me a Top-Up Loan

On there it just says CASH AMOUNT LENT £9396

No mention of it repaying a previous product (restricted use sec 11), as far as that agreement is concerned you had £9396 in cash credit from EGG costing you £2775 (charge for credit).

In three places on that first page it says CASH AMOUNT , LENT - you havent edited anything off of there have you?

How much was the previous loan outstanding, ppi on previous loan outstanding, and credit card outstanding ?

Credit Card PPI is paid monthly rather than a loan up front being paid off, so when the card was paid off it should only have paid off accrued PPI and spends oustanding.

The original loan - the ppi was an upfront loan to pay the premium, which you paid off over the loan term, so that would be included in the final sum. (have you got the original cca and closing statement on that one?)

If you are reclaiming that original PPI as missold, then you are claiming the original ppi and interest paid on it to the time that was paid off, then the interest paid to date on the amount (ppi plus interest calculated as your final balance) that you paid off with the new loan. (you know that I'm just getting it straight in my head)

Not sure why you call it a top up loan if it was purely consolidating the credit card and previous loan ? Did you receive any cash sum from the new loan (am guessing not by the precise figure lent).

Theres no cancellation rights - there's a three month period in which to accept or reject the offer of a loan (by signing the agreement) once signed the money is paid into your bank account within 4 days. No mention of paying the other loan/card. No cancellation rights suggest restricted use, other than that anyone looking at that agreement would think you had a cash loan of £9396 for use however you want paid into your bank account within 4 days of you returning the agreement.

What you are saying actually was the case was 4 days after returning the agreement EGG paid off the debts owed to them on the previous loan and the previous credit card (both EGGs)

Just making sure we have the right facts.

Any paperwork showing the pay off of the loan and c/card - to show it came direct from that loan ?

(1) A restricted-use credit agreement is a regulated consumer credit agreement—
(a) to finance a transaction between the debtor and the creditor, whether forming part of that agreement or not, or

(b) to finance a transaction between the debtor and a person (the “supplier”) other than the creditor, or

(c) to refinance any existing indebtedness of the debtor's, whether to the creditor or another person,

and “restricted-use credit” shall be construed accordingly.

(3) An agreement does not fall within subsection (1) if the credit is in fact provided in such a way as to leave the debtor free to use it as he chooses, even though certain uses would contravene that or any other agreement.

[The Debt Star]

Re: Egg Mis-sold me a Top-Up Loan

Hi Amethyst. My favorite moderator! Thanks for the detailed response. I reply to your questions as follows.

In three places on that first page it says CASH AMOUNT , LENT - you havent edited anything off of there have you?

No I have taken no figures off. That space is blank on my agreement.

How much was the previous loan outstanding, ppi on previous loan outstanding, and credit card outstanding ?

The old loan was for approx £4,550 or thereabouts. The ppi outstanding on that loan was approx £1030 (taking the apportioned APR already added into account).

Credit Card PPI is paid monthly rather than a loan up front being paid off, so when the card was paid off it should only have paid off accrued PPI and spends oustanding.

yes that's right, the accrued ppi. But if it was mis-sold to me then that should be taken off the balance transfer surely?

Credit card balance inclusive of ppi accrued was about £4,845

The original loan - the ppi was an upfront loan to pay the premium, which you paid off over the loan term, so that would be included in the final sum. (have you got the original cca and closing statement on that one?)

I didn't pay it off over the loan term. The old loan was paid up by the Top Up loan after only 12 of the intended 60 months. Yes, included in the original sum was the paid portion of the ppi plus the larger amount loaded onto the Top Up

Not sure why you call it a top up loan if it was purely consolidating the credit card and previous loan ?

Egg called it a Top Up Loan. see foot of page 2 of the agreement

Did you receive any cash sum from the new loan (am guessing not by the precise figure lent).

There was about £3 outstanding according to the SAR

Theres no cancellation rights - there's a three month period in which to accept or reject the offer of a loan (by signing the agreement) once signed the money is paid into your bank account within 4 days.

correct and there isn't on the older CCAs either. is this common with Egg?

No mention of paying the other loan/card. No cancellation rights suggest restricted use, other than that anyone looking at that agreement would think you had a cash loan of £9396 for use however you want paid into your bank account within 4 days of you returning the agreement.

precisely my point. Thank you, it is such a relief finding someone to take a look at this and agree with my reading of it.

What you are saying actually was the case was 4 days after returning the agreement EGG paid off the debts owed to them on the previous loan and the previous credit card (both EGGs)

100% correct in your understanding yes.

Any paperwork showing the pay off of the loan and c/card - to show it came direct from that loan ?

yes, the SAR provided me with all of that info

[Amethyst]

Re: Egg Mis-sold me a Top-Up Loan

lol, thanks Debt Star, just don't call me a moderator again horrible images conjoured and I'm crap at throwing any weight about anywhere lol.

Right, so 12 months into a loan with Egg, which you had PPI on, you refinanced to consolidate that and a credit card.

So yes there should have been the rebate on the PPI the term not covered regardless of whether it was missold (as thats a new claim come in after this loan commenced) so need to check the figures on that - sooooooo need your original agreement and closing statements/redemption figures and get bill/turbs to check them over (they are good at maths).

But then its difficult TO check because the two parts are not broken down - were they broken down in any supporting paperwork you have ? can you get that up on here ? £4,845 for the credit card pay off sounds like you have this figure handy? so the remaining £4551 was the redemption of the loan (so that needs to correspond)

I'm sure theres a prescribed term on restricted use that has to say what that restricted use is - ie specify what its repaying and seperate those figures ? I'm not sure on that so check it out in the relevant dates agreements regs.

Hadnt spotted the 'Top up egg loan' bit at the end, under PURPOSE. Thats not really correct is it. A) Its not a top up loan - as that would be a modifying agreement wouldnt it - ie. you have a loan for £5k, they advance a further £1k and modify the agreement to suit ?
This is a refinance of a LOAN and a CREDIT CARD - two seperate products with completely different terms - so its not a top up - barring the fact you got no cash from it.

If they had given you cash to pay off the credit card then it would still be restricted use but would be a multipart agreement and the figures would have to be split.

Now this is where we need a CCA guru to come remind us on the rules on this and what the relevant section of the CCA is for restricted use debtor creditor agreements are.

Glad my ramblings helping a bit. First step is to check the calculations on the redemptions, then sort out the value of the PPI miselling claim (is that the one with the FOS btw?), whilst sorting out if indeed this agreement should specify the breakdown of what the money is for.

[Amethyst]

Re: Egg Mis-sold me a Top-Up Loan

oh, forgot to say, the PPI is no longer PPI (that ended when you redemed it) its just a debt needs paying off, so no it shouldnt be seperated in this ''top up loan' agreement.

Also, those random CASH AMOUNT LENT words in random places in the agreement make no sense apart from at the top above the umm cash amount lent £9k figure.

[The Debt Star]

Re: Egg Mis-sold me a Top-Up Loan

lol, thanks Debt Star, just don't call me a moderator again horrible images conjoured and I'm crap at throwing any weight about anywhere lol.

lol, no worries, I know you're not Darth Cerberus

there should have been the rebate on the PPI the term not covered regardless of whether it was missold (as thats a new claim come in after this loan commenced) so need to check the figures on that - sooooooo need your original agreement and closing statements/redemption figures and get bill/turbs to check them over (they are good at maths).

I'll post up the figures and copies of the original agreements etc

But then its difficult TO check because the two parts are not broken down - were they broken down in any supporting paperwork you have ? can you get that up on here ? £4,845 for the credit card pay off sounds like you have this figure handy? so the remaining £4551 was the redemption of the loan (so that needs to correspond)

No, Egg didn't break down the old credit repaid. My SAR tells me what they paid less the usual interest discount on early settlenent of the old loan (which had nothing to do with the ppi at all)

I'm sure theres a prescribed term on restricted use that has to say what that restricted use is - ie specify what its repaying and seperate those figures ? I'm not sure on that so check it out in the relevant dates agreements regs.

Hadnt spotted the 'Top up egg loan' bit at the end, under PURPOSE. Thats not really correct is it. A) Its not a top up loan - as that would be a modifying agreement wouldnt it - ie. you have a loan for £5k, they advance a further £1k and modify the agreement to suit ?

Exactly. There was a sliught £3 amount of cash for some reason so in a sense part of it IS a cash loan and hence restricted/unrestricted but yes, in the main it is restricted use and nothing on the agreement says that. It isn't a top up in reality at all but they do call it that. Another raeson for me to say it was mis-sold. That and the fact the blighters are capitalising the ppi and interest paid on it.

If they had given you cash to pay off the credit card then it would still be restricted use but would be a multipart agreement and the figures would have to be split.

they did lend the top-up for the purpose of repaying the card though but yes, the figures should have been split imo

Now this is where we need a CCA guru to come remind us on the rules on this and what the relevant section of the CCA is for restricted use debtor creditor agreements are. First step is to check the calculations on the redemptions, then sort out the value of the PPI miselling claim (is that the one with the FOS btw?), whilst sorting out if indeed this agreement should specify the breakdown of what the money is for.

The FOS have been asked to look into the ppi and mis-selling of the top-up, all kind of interconnected.

I will post up the Egg calculations so that someone can perhaps help me calculate the values of the ppi claims. I have had a butchers at it and these were fired off to Egg with a F&F they rejected. So will be interesting to see what you make of my calculations.
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oh, forgot to say, the PPI is no longer PPI (that ended when you redemed it) its just a debt needs paying off, so no it shouldnt be seperated in this ''top up loan' agreement.

Also, those random CASH AMOUNT LENT words in random places in the agreement make no sense apart from at the top above the umm cash amount lent £9k figure.

Yes, the ppi is no longer benefiting me. It ended in 2005 when the top-up loan paid off the old Egg products but I am still paying for the ppi and would be for another 5 years at present repayment rates (my account is in dispute but only since July)

The random words you refer to...yes that IS very suspicious isn't it? Probably because they didn't lend any cash in the first place - all used to pay the card and loan. Crafty blighters those Egg boys.