Debt Collection Agencies/Refunds

[di30]

Re: Debt Collection Agencies/Refunds

I'm afraid this is where my total ignorance of ppi stops me being able to answer this. If you can explain to me in simple terms how ppi works, I may be able to have a stab at answering the question.

Is ppi and integral part of a loan or a separate insurance policy?
Are all payments clearly divided into two elements - one for the loan, one for the ppi?
Is the ppi always with the same company as the loan, or does a lender act as an agent for another company?
When a loan is sold on, why is a ppi claim to the original creditor?

I think I know some of the answers,but would like to be sure - there may be more questiions then lol!

LOL that is fine....

Usually the PPI is added within the loan, to make one monthly repayment, so this would also attract interest....

There are however, stand alone insurance you can purchase to protect, loans, credit cards etc, but banks/financial businesses automatically sell their own product and include it within the loan.

For example, Lloyds TSB sell an insurance, and to what I know of in my friend's case, the underwriter for the insurance they used for his was Aviva, but it is all down to Lloyds to arrange it, they are responsible.

With the insurance being added within the loan, if the debt is passed on to DCA, it will include the balance of the PPI, but on a mis sell, you do pursue the responsible party for selling the product.

Have I missed anything folks, getting tired now? lol

[labman]

Re: Debt Collection Agencies/Refunds

Okay, thanks. My OC said in the assignment letter that the DCA was now the data controller of my information...

Did it, or did it say the DCA was now the data controller of the information previously held by them? Thus, the DCA takes on the right and duty to report to CRA's.

They cannot totally pass over responsibility if you think about, as if you have ppi the claim, I believe, goes to the OC. In order to process a ppi claim they must retain a right to process your data, or is this given on a ppi reclaim form?

[di30]

Re: Debt Collection Agencies/Refunds

With my friend's letter from Lloyds, it says, Lloyds has assigned "all of its respective rights, title, and interests of the above referenced account.
Under the terms of this assignment, and as defined in the Data Protection Act 1998, Cabot Financial (UK) Limited is now under the Data controller of your Personal Data contained in the records of this account"

This is why I think he should request for a copy of his CCA.

On his letter, it looks as if Lloyds had used BLS collections before selling the debt to Cabot to collect his payments.

[di30]

Re: Debt Collection Agencies/Refunds

Just having a read on the back of his Cabot letter.
IMPORTANT INFORMATON:

This letter acts as Notice of Assignment of your account to Cabot Financial (UK) Limited and as such should be kept by you at all times.

Cabot Financial (UK) Limited is the legal owner of the account as referenced.

Cabot Financial (Europe) Limited is the data controller. You have the right to access to information we hold about you.
If you wish to obtain a file on data that we hold about you, then you must write to:
The Data Protection Officer (address) and they charge the usual £10 fee, and this service may request evidence for eg, current passport, driving licence in order to complete request.

[labman]

Re: Debt Collection Agencies/Refunds

DPA 1998 Scedule One Part II

The fourth principle is not to be regarded as being contravened by reason of any inaccuracy in personal data which accurately record information obtained by the data controller from the data subject or a third party in a case where—(a)having regard to the purpose or purposes for which the data were obtained and further processed, the data controller has taken reasonable steps to ensure the accuracy of the data, and
(b)if the data subject has notified the data controller of the data subject’s view that the data are inaccurate, the data indicate that fact.

So, if an Absolute Assignment has taken place, and the Data Controller has now become the DCA, if they now process ANY data, the section above would indicate the new Data Controller has to take reasonable steps to ensure the accuracy of the information.

I wonder if this could be used to tie them in knots. I know I used the DPA very effectively against the DWP in a dispute resolved a year or two ago.

Along with asking for a copy of the agreement, as this will now mean they are going to commence processing your data, it might also be interesting to send a letter asking for their policy on ensuring the accuracy of information handed to them under an Absolute Assignment. I just hate that word 'reasonable!'

[Bill-K]

Re: Debt Collection Agencies/Refunds

Awesome posts from Labman, if I may say so.

I always think of PPI reclaiming as a 2-stage process. The first stage (or hurdle) is to prove - or get an admission of - mis-selling of the PPI. This has to come from the OC, as any subsequent agency would not have had any part in the sales process. If we can establish mis-selling, then we go on to the second stage, which is quantifying the claim.

The OC will have charged PPI up until the debt was passed to a DCA, and at this point there seem to be two possibilities. If the assignment was equitable, then the DCA is simply acting as a collection agent for the OC, in which case the OC has still been receiving the PPI payments (via the DCA) - so our claim is still with the OC.

If the assignment was absolute, then the DCA has bought the debt from the OC, along with all rights and duties. So they will then appear to be taking payments which include PPI, but will NOT be passing these to the OC. But this is complicated by the different ways in which a PPI premium is paid. If this debt was a loan where a single 'upfront' premium was charged, then the repayments on that loan do NOT actually contain an element of PPI - they contain an element of repayment toward the loan that was made to cover the cost of the upfront single PPI premium. The OC paid the PPI insurer/underwriter the total PPI 'lump sum' premium at the outset, and then proceeded to take repayments on a loan to cover this - and to charge interest on that loan. Whether or not they managed to get the insurer to refund that premium is not our concern.

But at some point, they sold the loan to the DCA at an undisclosed price, and the DCA bought it 'in good faith,' not knowing that it included a dodgy PPI deal. This is where the game of 'ping-pong' may start, I guess. The DCA will still be demanding full payment, even though they probably bought the debt cheaply. As it is they who are now taking our money, then I think we have a legitimate claim with them, because the debt has to be re-scheduled under FSA rules, and the DCA has accepted that responsibility. Again, it is - I believe - NOT our problem if the OC sold them the debt. That was a deal over which we had no control, and as such it is for the OC and the DCA to argue over. This is where the DCA will be tempted to 'fob us off' with the argument that we must take up our claim with the OC, but I don't believe we should accept that.

With a credit card, it's a bit different. The card account is effectively closed when it is passed to the DCA. Until that point, the OC has been charging a variable monthly PPI premium, along with account interest on the accumulated premiums. As soon as the DCA takes over, then no more PPI will usually be charged, as they will be collecting on a fixed amount - the balance owing on the card account. So, I think our PPI claim is entirely with the OC here.

[labman]

Re: Debt Collection Agencies/Refunds

http://www.legislation.gov.uk/ukpga/...9/introduction

Have a read - it's good stuff!

[di30]

Re: Debt Collection Agencies/Refunds

Ooh thank you Bill and Labman.
Bill also thank you for writing the info in full details via Labman questions of PPI, my head is tired now, so time for me to get some shut eye.

Look forward to coming back to this again tomorrow, and yes I agree Bill that is a fab post by Labman, will be re-reading again tomorrow morning with a clearer head.

Thanks again guys.

[labman]

Re: Debt Collection Agencies/Refunds

OK Bill, thank you, and that is all pretty logical and straightforward. One last question about that then. Say my repayments inc. ppi were £100 pcm. Would you expect the paperwork of the agreement to specify somewhere that £92.00 was towards the lump sum loaned and £8.00 was towards funding the 'loan' for the ppi?

If not, and this is much more your territory than mine, and I might regret asking this , my £100 contains interest. The ppi element must therefore be having interest charged on it at the same rate as the loan. When a reclaim takes place, I assume it is simply a case of taking the ppi total, adding the total interest payable on it to get a ppi+interest figure, then reclaiming that + further interest at 8%.

I have a strong feeling the answer is it doesn't work like that. If not, how does it work?

[labman]

Re: Debt Collection Agencies/Refunds

Re the DPA, it might save a lot of time if before posting questions here, you read Schedules One and Two (and Three for some things not yet been discussed here). The reason I say this is that for things like ppi reclaiming, it makes it clear that they can process your data without express consent, so exampleslike that are clearly covered. Read it - it's not hard going considering it's legislation!

Here's a link again:

http://www.legislation.gov.uk/ukpga/...9/introduction

[Bill-K]

Re: Debt Collection Agencies/Refunds

I'm not keeping up very well here, so I'm missing posts.

I'm afraid this is where my total ignorance of ppi stops me being able to answer this. If you can explain to me in simple terms how ppi works, I may be able to have a stab at answering the question.

Is ppi and integral part of a loan or a separate insurance policy?
It is ALWAYS a separate insurance policy - but the way in which it is paid for varies. I can think of three ways:
1. It is taken out as an entirely separate 'stand alone' policy - a bit like the old Endowment Assurance policies that were an integral part of Endowment Mortgages years ago. They were inextricably linked to the mortgage - but were kept entirely separate from them. Mortgage PPI often follows this 'model.' A monthly premium is paid to the insurer, and this is based on the monthly repayment amount at the time.
2. It is taken out on a credit card (or other revolving credit), and is a monthly premium based on the balance owing. This premium is charged to the card account each month, and is therefore included in the monthly repayments. In this case, a portion of the monthly account interest can be reclaimed, as it is directly attributable to the PPI. This is calculated on the cumulative total of PPI (and apportioned interest) - and NOT just on each separate monthly repayment.
3. It is charged as a single 'upfront' premium (often referred to as 'SPI.') This type of PPI is usually applied to fixed-amount loans, where the PPI premium is actually loaned to the borrower alongside the actual 'cash advance' loan. Although it is usually shown on the same agreement, it is treated as a separate loan for CCA purposes (as discursed in FSA Policy Statement PS 10/12). In this case, the PPI 'cover' often lasts for no more than a few years (typically 2-5), but the cost of it is spread out over the entire loan term (typically 10-30 years). In this case, account interest is charged throughout the loan period, and is refundable.
Are all payments clearly divided into two elements - one for the loan, one for the ppi?
No. As partially explained above, the PPI is entirely separate in scenarios 1 & 2. In scenario 3 ('SPI') - it is actually a single 'front-loaded' premium paid by the lender to the insurer. The lender then incorporates this into the total loan, and it becomes an integral part of the loan, with loan repayments covering BOTH the 'cash advance' loan repayments and the PPI loan repayments in one single monthly repayment amount. Turboman's 'apportionment' method separates these two out, when we need to calculate this.
Is the ppi always with the same company as the loan, or does a lender act as an agent for another company?
The PPI is with a separate insurer, and the lender collects the premium(s) and passes them to the insurer. Some sub-prime lenders appear to have 'milked' this idea, though, by charging a monthly amount which LOOKS like insurance - but in fact there is NO insurer. In effect, the lender 'takes responsibility' for what an insurer might have covered, and simply pockets the money themselves. IMO, this is literally a 'Protection Racket' !!!
When a loan is sold on, why is a ppi claim to the original creditor?
Hopefully, my previous post might help explain this - but it is purely my own take on this, and subject to trashing.

I think I know some of the answers,but would like to be sure - there may be more questiions then lol!

Go for it, mate. The envelope needs pushing, and I can think of no better guy to do it !!!

[labman]

Re: Debt Collection Agencies/Refunds

You did ask lol! I'm off to bed,but if you feel able to answer post 54, that would make great reading over breakfast!

It's really rather interesting when two or three separate areas suddenly come together like this isn't it. I think I'll be doing a bit of reading around as well - good stuff.

[Bill-K]

Re: Debt Collection Agencies/Refunds

OK Bill, thank you, and that is all pretty logical and straightforward. One last question about that then. Say my repayments inc. ppi were £100 pcm. Would you expect the paperwork of the agreement to specify somewhere that £92.00 was towards the lump sum loaned and £8.00 was towards funding the 'loan' for the ppi?

If not, and this is much more your territory than mine, and I might regret asking this , my £100 contains interest. The ppi element must therefore be having interest charged on it at the same rate as the loan. When a reclaim takes place, I assume it is simply a case of taking the ppi total, adding the total interest payable on it to get a ppi+interest figure, then reclaiming that + further interest at 8%.

I have a strong feeling the answer is it doesn't work like that. If not, how does it work?

The loan of which you speak is a 'SPI' loan (Example 3 in my post), I believe. Yes, the agreement almost invariably shows both elements of the loan (Cash Advance and PPI) - and this is a key document in calculating PPI redress on such loans. If we have a loan of £9,200 to which a PPI premium of £800 has been added, then we have a total loan 'Principal' sum of £10,000. This is from where the 'Apportionment Factor' is derived, and it is 8% (ie., 800 / 10000). Now, in the agreement, we will see that loan interest is added to this £10,000, and this may even vary throughout the life of the loan - BUT - no matter how the interest rate changes, the 'Apportionment facter' remains the same.

So - if the initial monthly repayments work out at £100, then 8% of those will be directly attributable to PPI (ie., £8). If those repayments eventually rose to £150 pm (due to interest rate rises), then the same 8% would apply, and the PPI element would rise to £12. So - we don't need to calculate the loan interest separately this way. "Simples."

And then, as you have surmised, we add 8% to each 'apportioned' monthly PPI repayment. You named that tune in one, Grasshopper. It DOES work like that !!! Enjoy your cornflakes.

[dogtired]

Re: Debt Collection Agencies/Refunds

Will have to re read and digest all the above! Bill has helped me on the thread about Sainsburys, for which many thanks!
Its still confusing as the two BOS were at the time with DCA and handled very differently.
I will have to go through both documents but do not remember seeing an assignment with the BOS one but the one from Cabot was in the same envelope which makes me think, again, if this was "genuine"Very informative as usual.
They both only sent very bad copys of application form.
Sainsburys was 1999 origanally the BS 1998. This passed first to Blair Oliver in 2002 then to Cabot in 2003, despite me keeping to agreed payments.
They seem on reading other threads one of the worst for doing this.

[Bill-K]

Re: Debt Collection Agencies/Refunds

It can seem complex - and I confess that I'm no good at explaining stuff. If you go through it enough times, then hopefully, it all eventually clicks into place. Turboman has made a significant attempt at explaining the mechanics of PPI redress calculations here:

http://www.legalbeagles.info/forums/...I-Calculations

BUT - let's not hi-jack Di's original thread purpose, which is (I think) to establish exactly who becomes responsible for PPI redress when a debt is 're-assigned.' I think the calculations should follow from this discussion, and not lead it.