Off-setting refunds (PPI/Charges) etc....

[di30]

In regards of customers owing debt, I am aware that any refund the bank/business can claw back the refund.

So what about if the debt is sold on?

I just thought I would bring this up, as this can be a confusing aspect for many.

Now from what I am aware of if any debt, the direct business can use the refund towards it, but lots of questions are asked on whether the 3rd party (the business who bought the debt) are entitled to any refund on PPI reclaims, bank charges and so on..........

I also think this may help many who are in this situation, so if anyone can please post up your thoughts on this, that will be helpful for everyone, thank you.

[Turboman]

Re: Off-setting refunds (PPI/Charges) etc....

Good post Di

Also--could anybody clarify:

Did I read somewhere that the 8% added to redress must be paid direct by cheque--not included with the main PPI Refund to merely reduce arrears?

[di30]

Re: Off-setting refunds (PPI/Charges) etc....

Cheers Turbo

My ex bro in law has an outstanding debt, due to ill health, he could no longer afford to keep the repayments going on a business loan, the insurance would not pay out due to pre med conditions, and he was recently informed that all refund plus the interest is going directly to them, now, I was in the knowledge that the interest comes back to the customer, so a little baffled on this to be honest.

[Bill-K]

Re: Off-setting refunds (PPI/Charges) etc....

This does seem to be a bit of a grey area, Di. It may perhaps hinge on whether the debt was actually sold to the DCA, or whether it was merely passed to them as collection agents for the OC. As agents, then I guess they would be obliged to collect what the OC would have collected - which would include any arrears owing. If they bought the debt, then I assume they bought an entitlement to pursue the total amount owing, which includes any arrears. So, again, it seems to me that they can 'claw back' any arrears amounts from any PPI refund. But it often seems to happen that the claimant is refunded the full amount of PPI, where the debt has been passed to a DCA.

Maybe it is because it is the OC who we claim it from, as it is the OC (or their agent) who mis-sold it. If the OC has since sold the debt on, then they have simply tried to cut their losses - but it WAS the OC who took the PPI premiums in the first place. Any arrears, however were effectively passed to the DCA to deal with - so it would be simpler to just refund all of the PPI and leave the DCA to try and claw back the arrears. I'm not sure if there are any rules, regs or laws that dictate which way to go about this. The bottom line is that the DCA has as much right to pursue the arrears as it has to pursue the rest of the balance, and as far as the DCA is concerned, it is all part of the same 'balance owing.' But I reckon that they don't have the right to 'appropriate' all or part of any sums paid to the borrower from another source - so they can't take a slice of the PPI refund which the OC pays to the claimant. JMHO, though.

Did I read somewhere that the 8% added to redress must be paid direct by cheque--not included with the main PPI Refund to merely reduce arrears?

You did, mate - and so did I. I'm not sure where the rules or regs are for this, but I believe it is because the 8% is 'COMPENSATORY' interest for loss of use of the moneys taken for PPI. As compensation, it must be paid directly to the injured party.

...all refund plus the interest is going directly to them, now, I was in the knowledge that the interest comes back to the customer...

This follows from Turbo's question. It depends WHICH interest we are talking about. If it is the portion of account interest ('Debited Interest') that was charged on the PPI, then this can be treated in the same way as the PPI premiums themselves - and possibly used toward repaying any arrears. But if it was the 8% Statutory rate 'Compensatory Interest' which Turbo has just mentioned, then I believe it MUST be paid directly to the claimant.

HTMS!!! ( = "Hope That Makes Sense !!!" )

[winner12]

Re: Off-setting refunds (PPI/Charges) etc....

Well thats an interesting one regard to the 8% I was paid by PPI from Barclays they took the whole lot to reduce the debt

[di30]

Re: Off-setting refunds (PPI/Charges) etc....

I have read my ex bro in laws letter of offer, and they have included the interest to pay towards the debt as well, but offered him £50 for the inconvenience and delays caused in sorting it all out, the £50 is on a separate agreement, where the 2 loan offers are on another to send to collections.
However, I note the one loan is an older one and settled, so why they are taking the refund from that one I do not know but did say to him to check on this with them.

This is LLoyds TSB by the way.

With mine, as many of you know I have been successful with all mine, lots of them lol, but the settled ones I did receive the refund direct in full, and the active one they treated separately.

[Bill-K]

Re: Off-setting refunds (PPI/Charges) etc....

As I said, I don't know what regs or laws are involved - but it might be worth writing and querying this, to get them to say clearly why they think they can 'appropriate' the 8% interest.