PPI to be set off against old loan sold to third party?

[vjohn82]

Received a letter from Barclaycard stating that they agree that the PPI was mi-sold... however as they sold the loan the PPI was "attached to" they would be setting this payment off against the old debt (payable directly to the third party).

The third party is Cabot for clarification.

Cabot has previously confirmed that the balance will no longer be collected due the Limitations Act (which was a fight anyway but all sorted).

So technically there is nothing to apply a credit to because the account, according to Cabot, has been closed.

Thoughts?

[di30]

Re: PPI to be set off against old loan sold to third party?

Hiya

Have you heard anything more on this?

[vjohn82]

Re: PPI to be set off against old loan sold to third party?

Hi,

Yes. I complained to the Financial Ombudsman who wrote this to me via email:

Dear Mr #######,

I write with reference to your above mentioned PPI complaint.

We have been advised by Barclays Bank Plc that it has provided you with an offer to settle your complaint by making a full refund of PPI premiums plus interest. I can confirm that this offer is in line with the Financial Ombudsman's guidelines as the agreed method to settle a PPI complaint. However, I understand that you have rejected this offer as you would like the settlement being offered to be paid directly to you rather than back on to your credit card to reduce the outstanding balance that currently exist on your account.

I should point out that as with all credit card arrangements, this service regards it fair and reasonable that any settlement payable can be used to reduce arrears that have accumulated on a credit card as it could be argued that the consumer has not actually paid the PPI premiums and therefore the refunds will put you back into the position you would have been in, had the PPI not been included from the outset.

I should point out that if your complaint is adjudicated by this service, and if it is recommended that your complaint is upheld, the likely recommendation for settlement will be the same. The only potential exception that could be considered is that if you are able to provide evidence that you have more pressing debts with other organisations that are charging you a higher interest rate than that on your credit card.

If this does apply to you, please provide me with evidence of the more pressing debts including evidence of the current interest being charged and I will forward this information to the appropriate team for full adjudication.

Should you wish to discuss this e-mail, please do not hesitate to contact me, in the meantime, please confirm how you would like me to process your complaint.

I look forward to hearing from you shortly.

Yours sincerely

David Sharp Adjudicator | Financial Ombudsman Service | Tel 02079 640872 | Fax 02079 640873 | South Quay Plaza, 183 Marsh Wall, London, E14 9SR

I replied with this:

Dear Mr Sharp,

I have a couple issues I would like addressing and I shall place your comments in quotations marks and respond accordingly for ease of reading:

Dear Mr #####,

I write with reference to your above mentioned PPI complaint.

We have been advised by Barclays Bank Plc that it has provided you with an offer to settle your complaint by making a full refund of PPI premiums plus interest. I can confirm that this offer is in line with the Financial Ombudsman's guidelines as the agreed method to settle a PPI complaint. However, I understand that you have rejected this offer as you would like the settlement being offered to be paid directly to you rather than back on to your credit card to reduce the outstanding balance that currently exist on your account.

The credit card account is “settled” and was closed by Cabot Financial Limited, the new owners of the debt. Therefore there is no balance to set the refund off against.

I should point out that as with all credit card arrangements, this service regards it fair and reasonable that any settlement payable can be used to reduce arrears that have accumulated on a credit card as it could be argued that the consumer has not actually paid the PPI premiums and therefore the refunds will put you back into the position you would have been in, had the PPI not been included from the outset.

I can demonstrate that the PPI deductions were actually paid on the account according to the statements at that time. Therefore if this is a consideration then I should be placed in the position I should have been before those payments were made; that is, cash in my account from the salary I was earning at the time which was paid onto the account to settle the PPI payments.

There can be absolutely no doubt that these PPI payments were made by me.

I should point out that if your complaint is adjudicated by this service, and if it is recommended that your complaint is upheld, the likely recommendation for settlement will be the same. The only potential exception that could be considered is that if you are able to provide evidence that you have more pressing debts with other organisations that are charging you a higher interest rate than that on your credit card.

I have a current credit card account with Vanquis which is being charged at 39.9% APR with a balance of £394.21 (credit limit of £250). I have fallen behind on payments for the account and the account is also over limit. I would be clearing a significant portion of the balance with any refund of PPI premiums that I paid in cleared funds.

If this does apply to you, please provide me with evidence of the more pressing debts including evidence of the current interest being charged and I will forward this information to the appropriate team for full adjudication.

What evidence do you require? Statements? Credit agreement? Please advise at your earliest convenience.

Should you wish to discuss this e-mail, please do not hesitate to contact me, in the meantime, please confirm how you would like me to process your complaint.

I trust this answers your email at this stage. I cannot stress enough that the credit card account is closed, the PPI premiums were paid at that time in cleared funds and there can be no dispute with the evidence and I do have a significant number of other debts (notwithstanding the Vanquis account).

Barclaycard have already admitted liability in this matter and refused to send me the Financial Ombudsman Guidance paperwork which states that a company can offset payments against a sold account or indeed an account that effectively has a “0” balance.

I look forward to hearing from you shortly.

Yours sincerely,

########### ######

He responded two days later stating that Barclaycard would be settling the amount in full via cheque.

Result!

[pompeyfaith]

Re: PPI to be set off against old loan sold to third party?

again the fos suck up to the banks good result glad you got it sorted PF

[di30]

Re: PPI to be set off against old loan sold to third party?

Great result vjohn82, well done!:first:

Yeah I totally agree PF.