Debt Collection Agencies/Refunds

[di30]

Re: Debt Collection Agencies/Refunds

Just to say I've sent a reminder to OFT to respond.

Excellent EXC. Look forward to hearing the response, once you receive it, thank you.

[di30]

Re: Debt Collection Agencies/Refunds

Thanks for that Di. My understanding is that the apportioned account interest (attributable to the accrued PPI payments) may be used toward whatever arrears still remain - BUT the 8% Statutory interest must be refunded to the claimant. These two different types of interest can cause confusion, and it would be good to see a clear written reply from the FOS about this.

Thank you again Bill.

And this is what I tried explaining to him.
He sent me his calculations, when i get round to it i will post them up and maybe see what lloyds have done. or hoping to do.

[EXC]

Re: Debt Collection Agencies/Refunds

Just to say I've sent a reminder to OFT to respond.

[Bill-K]

Re: Debt Collection Agencies/Refunds

Barsteward.

Spoken in John Cleese 'snooty' Oxford accent: "OK OK OK., Manuel. I'll have the b100dy Paella for breakfast like everyone else. I guess my 'Full English' was more like 'Double Dutch,' so here's Take 2."

The PPI payments accrued throughout the time that the account was open and active. Each month, account interest was debited to the account, and was calculated as a percentage of the balance owing (using the APR). An increasing portion of this balance was made up of the accumulated total of the PPI charged over the preceding months. Thus, an increasing portion of the account interest was directly attributable to the PPI, and is similarly refundable. In the calculation of redress, this interest is also added to the accumulated total of the PPI.

ALL of the above is the refundable PPI which is claimed - and which MAY be allocated toward any arrears still owing.

But there is a second form of interest which is awarded - and this IS an award, as it is 'compensatory' interest, which a court would order the lender to pay the claimant to compensate for the loss of use of any moneys which they might otherwise have enjoyed. With revolving credit, this is paid on any amount by which the account WOULD have been in credit if the PPI had not been sold. This is calculated at the Statutory rate of 8% simple interest, and is payable for any month where the above 'Notional Balance' would have been in credit. It ain't usually very much, but because it is technically compensation, then it cannot be 'appropriated' by the lender toward paying of any arrears.

Re: Debt Collection Agencies/Refunds

Qué?

[Bill-K]

Re: Debt Collection Agencies/Refunds

Thanks for that Di. My understanding is that the apportioned account interest (attributable to the accrued PPI payments) may be used toward whatever arrears still remain - BUT the 8% Statutory interest must be refunded to the claimant. These two different types of interest can cause confusion, and it would be good to see a clear written reply from the FOS about this.

[di30]

Re: Debt Collection Agencies/Refunds

Glad we concur, Di. If he can make it clear to the FOS that this does not need adjudication on mis-selling, because that has been admitted already. It simply needs an adjudication on whether the interest can be witheld. Hopefully, it might get 'fast-tracked' if it's a simple matter.

Bill, he messaged to let me know that he rang the FOS and mentioned about the interest, etc, and with the complaint already upheld, he said the caseworker said that there is nothing they can do just yet, and in regards of the interest, he was told yes they can use that towards the debt.
I am not sure how he worded his words about this to the FOS, as he does get confused.

[di30]

Re: Debt Collection Agencies/Refunds

Left him a message, thanks Bill..........again lol. x

[Bill-K]

Re: Debt Collection Agencies/Refunds

Glad we concur, Di. If he can make it clear to the FOS that this does not need adjudication on mis-selling, because that has been admitted already. It simply needs an adjudication on whether the interest can be witheld. Hopefully, it might get 'fast-tracked' if it's a simple matter.

[di30]

Re: Debt Collection Agencies/Refunds

Cheers for that Bill and exactly what I thought.

However, he has now taken it to the FOS, because he was not getting anywhere, if I had known about this before, then I said we would have helped all we can.
I'm sure the FOS will see through this though.....hopefully anyway.

[Bill-K]

Re: Debt Collection Agencies/Refunds

...the debt being within the collections dept of the bank. The bank said he was not entitled to any of the interest.

First time I've heard of that trick, Di. I would challenge it for 2 reasons I can think of right now.

1. If the bank had not mis-sold the PPI, then there is every possibility that the accounts would not have ended up in Collections dept., and the claimant should be entitled to refunds of penalty charges made as a result, along with interest on those - AND a refund of any higher interest rates charged.
2. This is against the FSA rules, which state that the claimant must be put back in the position they would have been if PPI hadn't been sold to them. Therefore 1 above applies, PLUS the refund of all interest which is attributable to the PPI payments. PLUS 8% SI.

We're not having this malarkey, are we folks ? !!!

[di30]

Re: Debt Collection Agencies/Refunds

Now after all this time, did I assume customers were entitled to the interest?

[di30]

Re: Debt Collection Agencies/Refunds

It also appears that the customer loses out on the interest as well (well not all customers), and I am speaking in regards of someone who was recently successful in 2 loan ppi reclaims, but the debt being within the collections dept of the bank. The bank said he was not entitled to any of the interest.

[EXC]

Re: Debt Collection Agencies/Refunds

Do you think the above enquiry would embrace all refunds, not just PPI ? Where an OC has misapplied charges and later conceded this was unfair (and by later I mean several years later), and agreed to refund ...then the same issue arises as to how this is undertaken.

Yes absolutely.

[Bill-K]

Re: Debt Collection Agencies/Refunds

In response to Jax - I would expect the OC to send a cheque for the full refund amount directly to the borrower if the debt has been settled in full. The DCA would have no further rights to collect any money whatsoever. If the OC did send the DCA any or all of the refund, then they have no right to keep it, and should send it to the borrower - or back to the OC.

Refunding by direct payment was never impossible, but 'offsetting' to a third party (DCA) is what we are questioning here - and with the OFT (via EXC).

To Di - I agree - there should be consistency and clarity, so that we all know what to expect.