Refund Calculation

[Guest]

Hi
I am sure this has been gone over before, but this is a new area for me so please bear with me.
I recently got around to reclaiming my PPI from MBNA, the account had been closed since 2009 when I paid off the defaulted balance.
I received a refund totalling £380 payment and interest inclusive. The account was opened in 2005.
I thought I would check there figures so I SAR’d them.
First thing I noticed was that the cash refund part of the money (£113) did not include annual charges of tagged as card protection, £29 a pop. Also the interest refunded did not seem enough to me.
I know there are excellent spread sheets on here, but I thought I would make my own. My account had been varied from time to time in that the interest charged was gradually increased from 10% when I signed up to over 39% when terminated.
My understanding is that the account should be re-calculated in order to obtain a position which would equal the one that would exist if the premiums had not been paid. So with this in mind I designed my spreadsheat to compound each individual payment, monthly at the applied rate, with the facility to alter that rate in the same manner as it was on my account.
I then summed the balance of the charges on a monthly basis and compared that sum with the amounts due on the monthly statements.
To my surprise I found that there was a point where the amount paid in premium plus the compounded interest exceeded the balanced owed on the account, and what’s more the charges for not paying the minimum payments should not have been raised because at that point I was in credit.
The letter which accompanied their payment said that they would not enter into any further discussion on the complaint so I sent it directly to the FOS together with my calculations. I think they owe me about £650 on top of what they have paid me; this includes compounded interest on the charges wrongly applied.
Has anyone been down this path before, and are there any errors in my logic. All comments appreciated.
[FONT='Calibri','sans-serif']Peter[/FONT]

[leclerc]

Re: Refund Calculation

Did they say why they would not enter into any further negotiations? Did they claim you had accepted the lower amount?

[Guest]

Re: Refund Calculation

Did they say why they would not enter into any further negotiations? Did they claim you had accepted the lower amount?

Hi L

No they said that their complaint proceedure had been exhausted in this matter and if i had any further problems i should contact the FOS, they enclosed the usual pamphlet explaining how to contact them.

Peter

[leclerc]

Re: Refund Calculation

In that case then the only issue is the calculation of redress

[Guest]

Re: Refund Calculation

In that case then the only issue is the calculation of redress

Yes i just hope i have my sums right.
I wonderd if any one else had reclaimed charges in this way, ie. because when they were applied when the account should have been in credit?

Peter

[Turboman]

Re: Refund Calculation

Just picking up on this--me Bill & Paul working on mine at moment

Will look at this thread late tonight as a bit busy---but do you want to post ypur spreadsheet -in public-or private to me & Bill?-

[Guest]

Re: Refund Calculation

Hi T

I think my figures are OK it is quite easy with a credit card because the TCC only consists of interest, the premiums just being another debit so it is just a matter of extracting them and their accrued interest.
Makes for quite long series of repeated caculation, but not particularily complex, ideal for spreadsheets.


Peter

[Angry Cat]

Re: Refund Calculation

"The job of regulators is that when the party's in full swing, make sure the partygoers drink responsibly...instead, they let everyone drink as much as they wanted and then handed them the car keys."

Redress means: back to the status quo

[Bill-K]

Re: Refund Calculation

Hi Peter,

Blimey, it's nice to find summat you're NOT fully conversant with, squire !!! The LEAST we can do is try and assist YOU for a change !!!

Sounds like you've got a good handle on this. Sure, with credit card claims, it IS possible for the accumulated total of PPI plus attributable penalties and account interest to actually EXCEED the account balance owing. This is an issue which has annoyed me since the CAG days. However, with PPI, the FOS have dealt with this (although NOT in a way which I think is altogether fair).

IF the 'notional' (or 'revised') balance would have brought the account into CREDIT, then (and ONLY then...grrrr....) we apply 8% SI to the amount by which the account WOULD have been in credit. Not nice - but tidy, I guess. Turbo and I have a spreadsheet which now does this, if you're interested.

[Guest]

Re: Refund Calculation

Hi Peter,

Blimey, it's nice to find summat you're NOT fully conversant with, squire !!! The LEAST we can do is try and assist YOU for a change !!!

Sounds like you've got a good handle on this. Sure, with credit card claims, it IS possible for the accumulated total of PPI plus attributable penalties and account interest to actually EXCEED the account balance owing. This is an issue which has annoyed me since the CAG days. However, with PPI, the FOS have dealt with this (although NOT in a way which I think is altogether fair).

IF the 'notional' (or 'revised') balance would have brought the account into CREDIT, then (and ONLY then...grrrr....) we apply 8% SI to the amount by which the account WOULD have been in credit. Not nice - but tidy, I guess. Turbo and I have a spreadsheet which now does this, if you're interested.

Hi

Thanks, believe me their are lots of things i am not conversant with, and the older i get the more there seem to be. I can send yoy my calculations if you have the time to take a look, but it is a bit clunky, like i say i designed it just for this one account.

It seems that the ACcOUNT WAS ACTUALLY IN CREDIT WHEN THEY APPLIED CHATRGES.

I applied the stat interest on my revised figures which i sent to the FOS.

Having some other issues with MBNA at the moment, brought to light by my SAR.
Nothing to do with PPi, but briefly they admit to stopping my card and my Virgin one because i sent a section 78 request. In their log one of their drones says" if he does not admit to having an agreement , then he should not be allowed to have a card". At the time my account was in credit and my request merely quoted section 78, a copy of my orriginal letter confirms this. One of their managers confimed the error in a letter which strangley did not appear in the SAR paperwork but luckily i kept.
Despite promising to re start my credit, they did not, instead increasing my interest rate from 15 to 36%.

Hence my subsequent default. I suspect that they were aware of my
postings on CAG and assumed incorrectly i was going to challenge the agreement.
I should not have defaulted in a fit of peek of course, but you live and learn.
just wondering what to do about this terible behaviour by them, also in the light of the revelations about the PPI.
Sorry for rambling.
Peter

[Bill-K]

Re: Refund Calculation

Blimey, Peter, that is an utterly appalling way to react to a lawful s78 request, isn't it ? Whether or not you had access to your agreement has no bearing on the issue - and if that idiot thinks that they should NOT issue cards to people who know their legal rights, then s/he should be sacked, IMHO. TBH, I think I would have defaulted in those circumstances - but yeah, I would have regretted it. You at least have good evidence to support your action, though, it seems.

I'd be happy to see if the spreadsheets that Turbo and I use concur with your figures, and I'll PM you, if I may.

[Guest]

Re: Refund Calculation

HI B
Yes I had two cards with MBNA, I was quite happy with them at the time one had an APR of 15.9 and one of 10%.
We were on a short beak in York and I went to get some money on the MBNA card, it was declined. I rang them and they said that it was a malfunction. I inquired again and they said that they were not happy with me withdrawing that amount of cash even though it was within my limit.
When I got home I rang again stating that it was a coincidence that this should happen after I put in a 78 request.
Shortly after I received a grovelling apology from there manager saying that, “this is not the way we do business “, and that they would re-start my cards.
They never did, instead they increased my APR to 30%+. I complained to the FOS and they eventually agreed to decrease my interest to 15% for six months as a gesture of goodwill. At the time I was involved in other health stuff so I did not pursue, but now I see what actually happened thanks to the SAR. It seems that there was a difference of opinions about if I should have my cards reinstated or not, as you say my request was totally lawful, and I made no threats to stop paying it just reminded them of their duty under the act.
It seems that someone had seen my work on CAG, particularly my guide on enforceability written in 06 and presumed wrongly I was going to contest my agreement. Salutary lesson there about user names on these forums, I have never hidden my identity, always believed you should have the courage of your convictions, unfortunately this is naïve rubbish, typical me.
Anyway this is all totally off topic I may start a new thread and am considering challenging the interest raises and general treatment under 140 after I have gotten the APR thing out of the way, I am also reclaiming PPI on the Virgin card. I have the time to give it my full attention now.
I will send my spready
Regards
Peter

[Guest]

Re: Refund Calculation

HI Bill
Just to update this thread
Thanks for looking at my spread sheet for me and rectifying my schoolboy errors, as you say the results are pretty much the same.
In retrospect I would probably have just used yours as it is far superior and if I may say so a masterly piece of work
Onwards and upwards I have just got my Virgin claim to sort out now.
Peter

[Bill-K]

Re: Refund Calculation

You're very kind, Peter !!!

But discussing the figures with you has thrown up the need for a possible revision based on the FSA calculation examples, which Turbo and I are going to look into.

[Guest]

Re: Refund Calculation

Hi Bill
Couldn’t sleep and was thinking about our dilemma over the FOS guideline.
It occurred to me that they would have to use a simple inters statement as their figure for the APR and this is why it is calculated down by 1/12 to the monthly value.
The problem with our spredsheats is that we use the formula ***%^12 to convert the monthly to the Annual and the reciprocal to do the opposite. This of course only works if there is nothing else but interest in the TCC.(interest oly)
In most case for credit cards this is the case but they cannot presume that, there may be fees or charges that would be in there and thus alter the APR, using the formulas we use would give an erroneous result, they have to use a figure that represents the flat rate only.
When credit card APRs are calculated they are done so on assumptions the issuer decides how much interest he is going to charge over a set period and sum laid down in the TCC regulations he then decides how much he is going to add in charges and fees, these get lumped together in the TCC and total credit , the result is divided by the appropriate number of months and the APR is calculated to reflect this relationship.
If as in most cases on a credit card the TCC has virtually no charges then it will be just the same.
There was a court case some time ago where a chap tried to prove the unenforceability of an agreement by doing the reverse calculation from the APR to the monthly interest (using our formula) rate and showing it was flawed, the judge said he was, “Looking down the wrong end of the telescope” and so he was, the effect of charges and fees in the total charge for credit meant his calculations were incorrect, as a proportion of them would have distorted the interest figure.
Hope this makes sense,
Peter