PPI Redress Process. Complex calculations.

[treatwise]

Hi guys, This forum looks absolutely fantastic and a real wealth of knowledge can be found here so just wanted to say keep it up

Basically I have been browsing this site and it looks like kind of information im after in regards to PPI redress but was looking for a more refined and precise answer to my question.

To summarise:

I'm currently employed working as a PPI Case handler for one of the major banks, I wont say who as could breach security and obviously lead to unwanted questions from customers of that bank but I am going down to London to hopefully work as a contractor in the redress department of a rival financial powerhouse

I have basic knowledge of this (know about the simple 8% and assoc interest on cards and such) I use it in passing when investigating a case I'm just a bit concerned about an assessment I will be doing as it calls for experience in complex redress calculations (Obviously a spreadsheet/calculator will be used in the job but I guess they want general knowledge showing initially)

What i'm after really is if anyone could summarise what this would potentially entail and the bullet points of the different scenario's (Calculations I can do myself)

example something along the lines of:

- Upheld firm, loan still active = work out interest rate at initital borrowing + 8 % simple interest to each payment etc etc

(I know this isn't accurate but bullet points of the main scenario's and the process I should follow would be much appreciated, I did download the updated FOS guide but it's incredibly lengthy and could probably be cut down into a couple of pages of precise notes.)

P.S I also have some case studies sent by my possible employer that I can apply the rules to just to test my workings.

Sorry if the post is a bit convoluted, if unsure please ask and any help is greatly appreciated

Kindest Regards.

[TUTTSI]

Re: PPI Redress Process. Complex calculations.

I have asked Bill K to look at this thread....

[treatwise]

Re: PPI Redress Process. Complex calculations.

I have asked Bill K to look at this thread....

Much appreciated Tuttsi

[Bill-K]

Re: PPI Redress Process. Complex calculations.

Hi Treatwise, and welcome to you. Thank you for being clear about your position, and we naturally respect that. Much as we would prefer to work WITH the banks, we find ourselves in opposition constantly. It is interesting to hear your views.

Basically, following a Consultation Paper CP 10/6, the FSA brought out Policy Statement PS 10/12 back in August 2010 in order to impose some sense following the PPI mis-selling scandal. Contained within this at Appendices 1 & 2 is the PPI Redress Handbook. Appendix 1 is often known as 'DISP APP 3,' and it contains the FSA Rules regarding PPI Redress Procedure. Appendix 2 contains 'worked examples' of how to implement the Rules in calculating PPI redress. If you disregard the rest of PS10/12, and concentrate on Appendices 1 and 2, then you will be streets ahead of the other monkeys who are clearly not being properly trained. I thus applaud you for taking the trouble - and having the guts and initiative - to ask us guys in here. We could do with more guys like you "across the counter."

I have boiled DISP APP 3 down to a 'core' set of para's, which I find are constantly being needed as 'reminders' to the banks - who are either genuinely ignorant of them, or are studiously ignoring them. I daresay that you will be encouraged to ignore these, too !!!

" The FSA Handbook on PPI Redress contained within PS 10/12 statesISP APP 3.2.1 The firm should consider, in the light of all the information provided by the complainant and otherwise already held by or available to the firm, whether there was a breach or failing by the firm.
DISP APP 3.2.2 The firm should seek to establish the true substance of the complaint, rather than taking a narrow interpretation of the issues raised, and should not focus solely on the specific expression of the complaint. This is likely to require an approach to complaint handling that seeks to clarify the nature of the complaint.
DISP APP 3.2.3 A firm may need to contact a complainant directly to understand fully the issues raised, even where the firm received the complaint from a third party acting on the complainant's behalf. The firm should not use this contact to delay the assessment of the complaint.
DISP APP 3.2.7 The firm should consider all of its sales of payment protection contracts to the complainant in respect of re-financed loans that were rolled up into the loan covered by the payment protection contract that is the subject of the complaint. The firm should consider the cumulative financial impact on the complainant of any previous breaches or failings in those sales.
DISP APP 3.3.1 Where a complaint is made, the firm should assess the complaint fairly, giving appropriate weight and balanced consideration to all available evidence, including what the complainant says and other information about the sale that the firm identifies. The firm is not expected automatically to assume that there has been a breach or failing.
DISP APP 3.3.2 The firm should not rely solely on the detail within the wording of a policy's terms and conditions to reject what a complainant recalls was said during the sale.
DISP APP 3.3.3 The firm should recognise that oral evidence may be sufficient evidence and not dismiss evidence from the complainant solely because it is not supported by documentary proof. The firm should take account of a complainant's limited ability fully to articulate his complaint or to explain his actions or decisions made at the time of the sale.
DISP APP 3.3.4 Where the complainant's account of events conflicts with the firm's own records or leaves doubt, the firm should assess the reliability of the complainant's account fairly and in good faith. The firm should make all reasonable efforts (including by contact with the complainant where necessary) to clarify ambiguous issues or conflicts of evidence before making any finding against the complainant.
DISP APP 3.3.5 The firm should not reject a complainant's account of events solely on the basis that the complainant signed documentation relevant to the purchase of the policy.
DISP APP 3.3.9 In determining a particular complaint, the firm should (unless there are reasons not to because of the quality and plausibility of the respective evidence) give more weight to any specific evidence of what happened during the sale (including any relevant documentation and oral testimony) than to general evidence of selling practices at the time (such as training, instructions or sales scripts or relevant audit or compliance reports on those practices).
DISP APP 3.7.2 Where the firm concludes that the complainant would not have bought the payment protection contract he bought, and the firm is not using the alternative approach to redress (set out in DISP App 3.7.7 E to 3.7.15 E) or other appropriate redress (see DISP App 3.8), the firm should, as far as practicable, put the complainant in the position he would have been if he had not bought any payment protection contract.
DISP APP 3.9.1 Where the complainant’s loan or credit card is in arrears the firm may, if it has the contractual right to do so, make a payment to reduce the associated loan or credit card balance, if the complainant accepts the firm’s offer of redress. The firm should act fairly and reasonably in deciding whether to make such a payment.
DISP APP 3.9.4 The firm should make any offer of redress to the complainant in a fair and balanced way. In particular, the firm should explain clearly to the complainant the basis for the redress offered including how any compensation is calculated and, where relevant, the rescheduling of the loan, and the consequences of accepting the offer of redress. "

Keep the rest of DISP APP 3 handy.

As regards the examples in Appendix 2, the ones I think you need to REALLY get a grasp of are Examples 6 and 8. The FSA doesn't even understand them, IMO. The banks certainly don't - despite their vast resources. WE DO.

[treatwise]

Re: PPI Redress Process. Complex calculations.

Wow, Bill I cannot say thank-you enough for taking your time out to read and sum up some key points used when assessing the redress outcome and I cannot speak for everyone but when stuff goes from department to department with different issues raised it possibly leads to breaches in cases and complete breakdown in issues and where the case is at, would be a lot more business-wise to train people on a set of skills rather than have 10 separate people but hey! Thats just my logic.

On a further note, that information is perfect and I do have a copy of that 10/6 handbook. In addition though are there certain rules and percentages that you pay for certain cards or loans? such as cancelled or active, it's just I see a lot of calculators on here for various different scenario's and was wondering if you have a breakdown of that as once i've worked out whether to uphold or deny then I need to work out their particular scenario or would it just be that once you have come to the correct conclusion is it the same calculation.

I'm sorry about my waffling just panicking a bit as it's a well paid job and I have signed all my declarations and agreements just don't want to look a fool in the assessment (especially seeing as i'm travelling from Manchester to London for an interview!), perhaps i'm thinking too much or too advanced but would each different loan have a certain percentage which is how you work out the total paid then add the simple 8% interest on top? OR is there more to pay back than the total PPI cover + 8%.

P.S I sense that you do not work for a Bank or financial industry Bill, where have you picked up this expertise from?

[Turboman]

Re: PPI Redress Process. Complex calculations.

from me--rofl:lol::lol:

.

P.S I sense that you do not work for a Bank or financial industry Bill, where have you picked up this expertise from?

[TUTTSI]

Re: PPI Redress Process. Complex calculations.

Wow Bill and Turbs, I never knew all this and really pleased that I called the 'A' team to answer this question raised by our new member. I have been helping another guy with a claim that has been rejected by the credit card company - if I may post these points from the FSA that Bill has posted on this thread onto his thread as there is one or two there which would help him with his claim and help get him back on track.

Cheers guys - I will buy a round of drinks at the next meet .......

[Bill-K]

Re: PPI Redress Process. Complex calculations.

LOL @ Turbo !!! Somebody give him a slap for me !!! Turbo and I have been doing forum claim calculations for over 6 years now. I was in electronics, but I first learned about reclaim calculations from the legendary Vampiress, whereas Turbo's knowledge is from the Aerospace Industry. He and I have worked together as the Diuretic Duo in various forums for over 5 years now. So - yes - he DID teach me a few things !!! I think you might find some of the 'Sticky' posts in the PPI forum helpful with your last questions, Treatwise. Also, Turbo has been working on an excellent thread explaining PPI redress calculations.

Here's a good summary of PPI from Paule:
http://www.legalbeagles.info/forums/...6545#post76545

And here are Turbo's explanatory threads:
http://www.legalbeagles.info/forums/...n-Amortization
http://www.legalbeagles.info/forums/...c-Spreadsheets
http://www.legalbeagles.info/forums/...-Settled-Loans

So - there are two basic types of PPI -the 'rolling PPI' where a monthly premium is charged to a credit card account, which is calculated as a percentage of the outstanding balance (PS 10/12 Appendix 2 Example 6 applies). And the single-premium (SPI) type, which is added as a one-off 'upfront' premium to fixed-amount loans (PS 10/12 Appendix 2 Example 8 applies).

With regard to Example 6, we have managed to replicate the calculations used in that example. With regard to Example 8, this illustrates the 'carry-forward' of PPI when loans are consolidated. Unfortunately, this is complicated by an 'Alternative Redress' aspect, which should ideally be ignored as it clouds the issue. The FSA calculation method is unneccessarily complex, and Turbo has developed a far simpler method which we call 'apportionment.'

However, in ALL cases, the amount being reclaimed consists of:
1. The PPI premiums actually paid/charged/debited;
2. Any penalties or other charges incurred as a direct consequence of the PPI being charged;
3. Any account interest which has been charged as a direct result of the above;
4. Any Compensatory Interest which is due on all of the above (usually termed 8% Statutory Interest).

The FSA examples cover these categories - but the banks nearly ALWAYS get it wrong. And THAT is unforgiveable, IMO. EITHER - they are genuinely incompetent - or they are relying on their customers having no idea how to calculate their due redress.

I do hope this stuff proves useful to your guy, Tuttsi.

LOL - I do believe that Tuttsi thought I was gonna kick yo' @$$, Treatwise - as we don't often see Financial Services employees openly asking us about this stuff. Yep - you were being cheeky. Yep - I'm suffering from a bad dose of GorillaFlu right now. BUT - yep - I'm ALL for doing ANYTHING that might get those idiots in the claims depts. properly trained !!!

However - any further questions MAY require you to purchase a limited edition Legal Beagles cuddly puppy - AND to keep it in a prominent position at your workstation, when you secure your new post - as I'm sure you now will !!! :beagle2222:

[TUTTSI]

Re: PPI Redress Process. Complex calculations.

I think you frightened Treatwise off Bill....it still looks incredibly complicated to me xx

[Bill-K]

Re: PPI Redress Process. Complex calculations.

LOL - Maybe, Tuttsi. I never bought one of those wretched little Beagle puppies myself - but I just thought it would be great if Treatwise DARED to put one on his workstation when he gets that job !!! Heyyy - Treatwise - there's NO obligation - I was just having a larf !!!

Seriously - this stuff is scary for all of us. We have the likes of Tuttsi, EXC and Kate keeping the MoJ - and Parliament - on the ball down there in the Smoke - and we all have stuff we can do, and stuff we can't do. We pool our resources and help each other as best we can. The FSA have made it as complicated as possible - to the point where even THEY cannot understand it. Guys like Treatwise have an enthusiasm, and I hope a conscience. If he is half the guy I think he is, he will be checking out that stuff, and he will get that job. If he is half the guy I think he is, then he will be disgusted at what he finds.
Treatwise - check out the maths, check out the Regs, then check out your conscience. Remember that you will need to live with that for many years to come.

[treatwise]

Re: PPI Redress Process. Complex calculations.

Hi Guys, Sorry for the late reply, kind of rude of me to quickly check back and not reply but it's been hectic! I have summarised the notes into bullet points and printed them out so just taking a bit of time to familiarise myself with them then apply to case studies but I cannot say thanks enough to both Tuttsi for going out of your way to find someone who could help and obviously Bill for being the Man with the Knowledge!

Afterall It's good money so some background research can't help, if you guys have any idea about the banking contractor world you will know that most big 4 will take on upwards of 200+ every couple of months especially now there is the new CPP uproar! so it's not one fixed job, but eh, a heads up cant help and with it being a new bank with different systems and programs, cannot expect to jump straight in so training will be given.

Oh and on the Beagle Puppy, Why not! Just a loveable Dog, nothing wrong with that. I can have a big print out behind my monitor

[TUTTSI]

Re: PPI Redress Process. Complex calculations.

Hi Treatwise, hope that you you interview goes well and wish you sucess. I put the link here for the last remaining Beagle Puppies should you want to buy one....... x

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[Bill-K]

Re: PPI Redress Process. Complex calculations.

I'm glad you found my summary useful, Treatwise !!! As I said, it's commendable that you have made an effort to check things out, and I hope your new employer takes on many similar staff to yourself. I am intending to report at least one of the major banks to the FSA for completely failing to understand the FSA rules on calculating PPI redress, and TBH, I think it's yet another scandal that needs publicity.

Whenever we have asked for detailed calculations, we have been given nothing more than a bunch of sub-totals. Whenever we have provided lenders with our own calculations, they have usuallky been either misunderstood or studiously ignored. I have yet to see copies of ANY of the spreadsheets they use for their erroneous calculations.

Interesting to hear that they are taking on 200+ new staff per month - I might even put in for a post myself, as I'm semi-retired !!! TBH, I didn't realise the newer CPP scandal would need so many new staff - UNLESS the banks are actually doing what they have been told by the FSA for once, and are genuinely pro-actively seeking and dealing with CPP reclaims.

I do wish you well with your interview, and every success with your career. Please do stay in touch with us here. If we can actually help the lenders to calculate their redress offers CORRECTLY, then we are only too happy to do so !!!

[treatwise]

Re: PPI Redress Process. Complex calculations.

Hi guys, again apologies for the late reply ( I swear I'm not like this with customers!!)

Good news though is that I went down to London as arranged and passed the interview and assessment stage. We were given a case study with a customer loan application and PPI application form a long with the complaint letter and we basically had to work out the issues and whether it was a valid claim for mis-selling then work out the appropriate redress. Got over 80% in total so still room for improvement but got the appropriate redress and upheld it correctly.

Anyway I have now been passed onto the client and have a telephone interview for the company who I'd be working for, so should be placed on assignment provided I don't turn the telephone interview into a car-crash.

I Know I have probably pushed you all a little further than I should but I really appreciate the advice, I am currently writing up some notes so i'm not stuck on the spot for my Interview and was hoping whether, (Bill especially) could point me in the right direction of what I should be focusing on when dealing with PPI and redress based on the confirmation email I received:

"This is primarily for the client to gain a better understanding of your PPI product and process knowledge. The client may also ask about the FOS and FSA.

They are also likely to ask a couple of competency based questions. Previously these have been focused around working to targets whilst ensuring quality standards are met and dealing with difficult customers. They may also ask you how you perform under pressure."


I know all this panicking and the initial post wasn't needed as the actual job and assessment was easier than anticipated and again this will probably be just routine but what area's of FOS and the FSA would be particularly relevant to mis-sale and redress of PPI.

Regards

[Turboman]

Re: PPI Redress Process. Complex calculations.

Hi Treatwise

May I suggest you also go read all the stuff on the big PPI threads in MSE & CAG as well as here

You will soon then be able to answer your own questions