Need help with FOS letter after 2nd rejection letter from MBNA

[Angry Cat]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

As I understand, the FOS have to abide by the FSA/FCA rules. For PPI redress, these are in PS 10/12, Appendices 1 & 2. Appendix 2 contains 8 examples of how to calculate redress. Example 6 shows how it should be calculated in this case.

If we take the figures in example 6, and apply the MBNA method to them, then we should get the same result if MBNA are following the FSA rules. If we don't, then they are breaking those rules.

If we could understand exactly how the example 6 figures are calculated, we could do this a different way - by applying those calculations to the FACTUAL amounts and dates that MBNA have supplied Kelly with. This is the method that the FSA/FCA prescribe, and it is not the method that MBNA are using.

I will be so bold as to say that I know this because I DO understand exactly how the example 6 figures are calculated.

"Not a lotta people know dat."

Very glad to hear that you DO know Bill...!

The following comment is a little nit picky but I found it odd that MBNA refer to the FOS technical guidance, when one would have expected them to refer to the FSA/FCA rules!

Personally, I do not believe that they are using the correct interest rates when calculating their reconstructed accounts;
mine went up and down like a yo-yo, mainly up and sometimes with shocking default/delinquent rates!

[Bill-K]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

Not explaining myself particularly well here, my apologies, I'm sure Bill will have a better idea what I'm on about.
'Fraid not - but that's only because I'm not interested in bull$h1t with waffles. If MBNA are not using the prescribed methods, then that's all we need to prove, IMO. Surely, there's no need to go into any more detail after that ? Whatever BS they churn out is of no consequence.
Feel free to ignore my inane ramblings, but I think the best idea is to put the figures in a spreadsheet set up to calculate the FOS's/FSA's method of redress and compare those.
Agreed 100%. But I have yet to come across such a spreadsheet...

...as the maths geek said to the strippagram.

....

[Bill-K]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

The following comment is a little nit picky but I found it odd that MBNA refer to the FOS technical guidance, when one would have expected them to refer to the FSA/FCA rules!

I agree - the FOS stuff derives from the FSA/FCA source, as I understand it. MBNA enjoy the vagueness of that.

[Angry Cat]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

I agree - the FOS stuff derives from the FSA/FCA source, as I understand it. MBNA enjoy the vagueness of that.

Well Bill-K, you know what they are like...pulling words out of the big blue sky...
can you smell fish!?

[Angry Cat]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

If you take out the 'reconstructed payments' which seem rather beneficial on MBNA's side it would make quite a big difference. However , on the first reconstructed payment the balance would have been below the figure that was paid so it does have to be accounted for.

If you look at Jun 00 there was a payment made of £4000 - MBNA have decided had there been no PPI she would only have paid £3606 leaving a balance - I'd say that Kelly had £4k available - she would have paid the entire balance off that month rather than leaving a small amount accruing interest. Similarly when things got harder and they reverted to minimum payments can it be said for certain they would have paid off just the minimum balance if it were £1.74 rather than £58 odd ?

However they are adding simple interest only on the 'overpayments' (surplus redress) at the time whereas I'm pretty sure they should be adding the 8% on the PPI Premiums paid and interest gained on such rather than just what MBNA reckon was an overpayment each month.

Not explaining myself particularly well here, my apologies, I'm sure Bill will have a better idea what I'm on about.

I agree that in months where Kelly paid more to her account that she would have done had the PPI+interest thereon never have been applied - she has lost use of that money so indeed she should get 8% simple interest and that amount repaid. Fair enough but who decides what she would have done?

BUT MBNA don't adjust Kellys payments all the way back so the simple interest is only accrued from a year after the PPI started, and on Day 1 when she paid £3.97 PPI and interest was charged on it, she should get that back plus 8% across the whole period.

Do we know MBNA's method of charging interest - does the PPI payment get paid first or last (ie does it attract interest in a month there was a payment over the amount of the PPI ?)

Feel free to ignore my inane ramblings, but I think the best idea is to put the figures in a spreadsheet set up to calculate the FOS's/FSA's method of redress and compare those. Where the payment would have been more than the balance due to the PPI+interest thereon being removed then I think a truer picture would be to pay off the balance. Minimum payment parts are a bit stickier.

MBNA, charged the interest after the PPI premium was applied!

[Ken100464]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

Very glad to hear that you DO know Bill...!


Personally, I do not believe that they are using the correct interest rates when calculating their reconstructed accounts;
mine went up and down like a yo-yo, mainly up and sometimes with shocking default/delinquent rates!

This bit as Bill will now know is why I have shyed away from trying to beat them on figures. I take the yo yo interest rates as a result of daily interest and also the fact you could have different rates for different tranactions. Balance transfers, purchases cash and the like. It all means the interest rate will bounce like a yo yo. If we cant replicate that then frankly we are peeing in the wind saying oi yah bankers we want this amount because our less detailed spreadsheet says so. Cant see FOS saying oh ok here we go give em the lucre.

Thats why its got to be about discrediting the method unless I am about to be enlightened lol

[Ken100464]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

If you take out the 'reconstructed payments' which seem rather beneficial on MBNA's side it would make quite a big difference. However , on the first reconstructed payment the balance would have been below the figure that was paid so it does have to be accounted for.

If you look at Jun 00 there was a payment made of £4000 - MBNA have decided had there been no PPI she would only have paid £3606 leaving a balance - I'd say that Kelly had £4k available - she would have paid the entire balance off that month rather than leaving a small amount accruing interest. Similarly when things got harder and they reverted to minimum payments can it be said for certain they would have paid off just the minimum balance if it were £1.74 rather than £58 odd ?

However they are adding simple interest only on the 'overpayments' (surplus redress) at the time whereas I'm pretty sure they should be adding the 8% on the PPI Premiums paid and interest gained on such rather than just what MBNA reckon was an overpayment each month.

Not explaining myself particularly well here, my apologies, I'm sure Bill will have a better idea what I'm on about.

I agree that in months where Kelly paid more to her account that she would have done had the PPI+interest thereon never have been applied - she has lost use of that money so indeed she should get 8% simple interest and that amount repaid. Fair enough but who decides what she would have done?

BUT MBNA don't adjust Kellys payments all the way back so the simple interest is only accrued from a year after the PPI started, and on Day 1 when she paid £3.97 PPI and interest was charged on it, she should get that back plus 8% across the whole period.

Do we know MBNA's method of charging interest - does the PPI payment get paid first or last (ie does it attract interest in a month there was a payment over the amount of the PPI ?)

Feel free to ignore my inane ramblings, but I think the best idea is to put the figures in a spreadsheet set up to calculate the FOS's/FSA's method of redress and compare those. Where the payment would have been more than the balance due to the PPI+interest thereon being removed then I think a truer picture would be to pay off the balance. Minimum payment parts are a bit stickier.

I think to rather more prove Bills lets not enter into discussing MBNA's world and stick to the FCA world another pointer to what garbage this is. Not having a do at anyone just know to make things murky is where FOS adjudicaters wont understand and cases will be lost.

Look at that spreadsheet around March 2003.

Kelly pays £58.17 which they class as a minimum on the Balance of £2587 so they then work out the minimum on the new recon balance which is £1.68 and remove the difference into the surplus pot. Thats the £56 moving out of associated interest land.

But in Apr Kelly pays £158 on £2469 which all of a sudden becomes full settlement which of course it would have been on the reconstructed balance. But you cant use minimums and want to remove money on the original blance then decide the original balance doesnt suit so we will use the reconstructed for full payments. Why? Oh its lower of course so Kelly will hit a full payout on the reconstructed quicker. And the best bit is they can now remove all the payments out of contractual interest.

So now they have removed this money and are paying 8% because they say the reconstructed balance was in credit. Thats correct and thats what FCA indicate is right. What they dont do is leave that money in the balance so when Kelly spends again none of that money is taken off the balance. Its gone from that moment. But in real life of course it hasnt because all along Kelly never went into credit and all along she was having contractual interest applied.

So all along this is about the difference between paying contractual interest which she did accrue and is in the balance and the 8% for them having your dosh but as we all know is taxable so the government gets its cut to.

I still think its the method that needs challenging and to do that you have to keep pointing FOS to the FCA rulebook. If MBNA wished to use an alternative then they should be explaining to the consumer what they have done and the FCA explicitly states they should not be using an alternative method to reduce the payout.

I know in my case I have had no explanation at all just obstruction as to what they are up to.

[Angry Cat]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

This bit as Bill will now know is why I have shyed away from trying to beat them on figures. I take the yo yo interest rates as a result of daily interest and also the fact you could have different rates for different tranactions. Balance transfers, purchases cash and the like. It all means the interest rate will bounce like a yo yo. If we cant replicate that then frankly we are peeing in the wind saying oi yah bankers we want this amount because our less detailed spreadsheet says so. Cant see FOS saying oh ok here we go give em the lucre.

Thats why its got to be about discrediting the method unless I am about to be enlightened lol

But, the interest rate will be shown on your statements!:beagle:

[Angry Cat]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

http://www.consumeractiongroup.co.uk...lations/page10

[Turboman]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

..I thought that was what you are detailing here:

http://www.legalbeagles.info/forums/...568#post306568

Originally Posted by Amethyst Not explaining myself particularly well here, my apologies, I'm sure Bill will have a better idea what I'm on about.
'Fraid not - but that's only because I'm not interested in bull$h1t with waffles. If MBNA are not using the prescribed methods, then that's all we need to prove, IMO. Surely, there's no need to go into any more detail after that ? Whatever BS they churn out is of no consequence.
Feel free to ignore my inane ramblings, but I think the best idea is to put the figures in a spreadsheet set up to calculate the FOS's/FSA's method of redress and compare those.
Agreed 100%. But I have yet to come across such a spreadsheet...

...as the maths geek said to the strippagram.
....

[Angry Cat]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

Clearly, we need to dissect how MBNA recalculate and ascertain why they prefer to use the FOS guidance:
http://www.financial-ombudsman.org.u...i/redress.html
as opposed to adhering to the FSA/FCA Redress!
http://fshandbook.info/FS/html/handbook/DISP/App/3

[Ken100464]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

what we know

• you took out your credit card in January 2003 and took out the PPI policy at the same time;
• your credit card balance today is £5,832.91; and
• you have consistently paid the minimum contractual payment to your credit card and no extra payments.

what we have assumed

• credit card interest at the rate charged on normal purchases applied to the PPI premiums added to your account; and
• you would have paid the (slightly smaller) minimum contractual payment to your credit card without PPI.

If you do not think that these assumptions should be used in your circumstances, please let us know why not.
what we have calculated

• if you had instead taken out your credit card without the PPI policy, your credit card balance today would be £2,642.94. We know this because we’ve looked at your credit card account from the day it started until now and worked out what the balance would have been without the cost of PPI and any interest and charges you paid as a result of PPI being included on your account; and
• the payments you have paid have been slightly higher than the payments we have assumed in our calculation. The difference between the payments you have paid and the payments we have assumed you would have paid to your account without PPI is £518.73.

what we will do

• We will cancel the policy for you and will pay to you the difference between your credit card balance today (£5,832.91) and what your credit card balance would have been without the PPI policy (£2,642.94), which is £3,189.97.
• In addition we will refund to you the extra monthly payments you paid as a result of having PPI added to your credit card and we will also add interest at 8% per year simple to compensate you for the loss of use of that money. That adds up to £518.73 plus interest of £127.60.
• In total therefore we will pay you £3,836.30 compensation (£3,189.97 plus £518.73 plus £127.60).

The highlighted text is the crucial bit. Is the difference between the actual minimum payment and the new theoretical payment an additional compensatory amount or is it replacing the preferred method of redress we all know.

If its replacing the preferred method then MBNA have it right according to FOS. If its in addition then they have it wrong.

Full payments have a similar method of doing it.

If it is correct then they get to keep the difference between the associated interest and 8% which is why our amounts dont tally with theirs.

[Bill-K]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

..I thought that was what you are detailing here:

http://www.legalbeagles.info/forums/...568#post306568

No. Those spreadsheets work out PPI redress using our own calculation methods - NOT the FSA methods. They do take into account the main changes that PS 10/12 brought about - but they do NOT use the FSA calculation methods.

We now need to use them, so that we can produce an identical spreadsheet to the example 6 that the FCA use. We can then compare the results with MBNA's figures and show that they are not adhering to the FCA rules. The FCA example does NOT make any assumptions about imaginary payments - it deals with FACTUAL figures.

[Turboman]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

Sorry---trying to keep up but I am not able to appreciate everything that has been posted yet (I am a temp carer--and its hard)

But I thought the CC SS's were reflecting ps10/12 which were the FSA new mehods re Ex 6--ie-that barclaycard one you did for me--are you saying there is some new document re current FSA methods?--which I am not up to speed on yet?

No. Those spreadsheets work out PPI redress using our own calculation methods - NOT the FSA methods. They do take into account the main changes that PS 10/12 brought about - but they do NOT use the FSA calculation methods.

We now need to use them, so that we can produce an identical spreadsheet to the example 6 that the FCA use. We can then compare the results with MBNA's figures and show that they are not adhering to the FCA rules. The FCA example does NOT make any assumptions about imaginary payments - it deals with FACTUAL figures.

[Bill-K]

Re: Need help with FOS letter after 2nd rejection letter from MBNA

But I thought the CC SS's were reflecting ps10/12 which were the FSA new mehods re Ex 6--ie-that barclaycard one you did for me--are you saying there is some new document re current FSA methods?--which I am not up to speed on yet?

No. Those spreadsheets work out PPI redress using our own calculation methods - NOT the FSA methods. They do take into account the main changes that PS 10/12 brought about - but they do NOT use the FSA calculation methods.

Those are the same spreadsheets that we have been evolving since before PS 10/12. There were two essential changes that PS 10/12 brought in with regard to credit card PPI calculations. One was the way the 8% interest is calculated on the 'Notional Balance,' and the other was the way that account compound interest was calculated. The spreadies were simply adapted to use these methods in order to arrive at the correct result.

So there is no new 'diktat' - we are still referring to PS 10/12 - BUT - we are now having to fully emulate the FSA's 'methodology' in order to show that MBNA's methodology is not supported by the FCA.