PPI Settlement Offer from Egg but unsure if their calculations are correct!!

[figgydoody]

Hi everyone.

I have recently joined and have been reading posts about PPI. I had a complaint with Egg regarding PPI that was added to a loan, however they rejected the complaint back in Sept 2008, and for various reasons I didn't follow the matter up.

Anyway, I received a letter from Canada Square Operations (Egg) at the beginning of March this year stating that they have re-assessed the complaint, and decided that I am now due a refund! Funnily, they haven't bothered to advise me on what grounds they have upheld the complaint, but I can't say I am altogether surprised as there were some very interesting things they did in a bid to 'prove' to me it hadn't been missold!lol

Suffice to say, I don't trust them at all, and am not convinced that the figures they have quoted are accurate. The problem is, I am totally confused about the spreadsheets used to calculate what they owe me, and wondered if someone can help me work out what the true sum owed is, and also, if I need to go back to them to get further information, what questions I should be asking regarding their calculations.

The info on the loan is as follows:

The loan was set up on 9th Dec 2002, first pmt on 23rd Jan 2003. It was for £15000, the PPI component was £3220.35, total amount £18220.35. To be repaid over 72mnths @£316.49 per mnth.

The interest rate on the agreement was: 7.66%
The APR on the agreement was: 7.90%

I made 14pmts in total, one pmt was returned as unpaid, and I paid the whole loan off on 16th April 2004.

When I complained about the PPI, I was advised in their reply that they only charge for PPI for the period of time the loan has run. So, according to them, the settlement figure included a PPI rebate of £1887.12. Further, as the loan has only run over a 17mnth (?) period, they did not charge any PPI cover for the remaining 55mnths. They go on to say that PPI pmts are higher at the start of the loan as the value of the loan is higher because the risk is greater. So, according to them I had only paid £1333.23 in PPI.

The offer they are now making is calculated as follows:

Total PPI premiums paid: £3220.35
Plus interest on premiums paid: £305.68
Plus 8% interest: £1256.50
Subtotal: £4782.53
Less any previous rebate: £1887.12
Total award of compensation: £2895.41

I would really appreciate some help with this, as I don't believe for a moment they are offering me what is actually owed!

Many thanks in advance,

Figgydoody.

[di30]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

Hi and welcome

Well done on your success! ;-)

I am not the one for the calculation side of it, but if you haven't yet done so, check the link below done by turbo/bilk etc of understanding ppi calculations, any probs from there please let us know and I'm sure someone will be along to clarify on this soon.
http://www.legalbeagles.info/forums/...I-Calculations

However, what I do know is what you should get back is each premium you have paid to the account, and the relevant interest, plus 8% int of what a court would normally award.

Any rebate shown in the calculation of the refund, would mean if the loan was settled earlier, they would reduce the amount owing, so the ppi is taken into account as well. So minus the rebate (which you would not literally see, as this is used to reduce the loan amount balance), and after rebate, if the refund they owe you, as said above, each payment you paid to ending/settling the policy and interest. x

[figgydoody]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

Hi Di,

Thank you for the welcome and your comments, I appreciate it!

I have looked at the spreadsheets and accompanying information drafted by the very knowledgeable guys on here, but confess I am none the wiser!lol It all reads like a foreign language, I just don't get it, no matter how many times I read it! I am a hopeless case!lol

Kind regards,


Figgydoody.

[di30]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

Hi Di,

Thank you for the welcome and your comments, I appreciate it!

I have looked at the spreadsheets and accompanying information drafted by the very knowledgeable guys on here, but confess I am none the wiser!lol It all reads like a foreign language, I just don't get it, no matter how many times I read it! I am a hopeless case!lol

Kind regards,


Figgydoody.

Hi there

Your very welcome and don't worry, and no of course your not an hopeless case lol ;-) I get confused when it comes to calculations, but what I can make out of it then, they are saying that you paid approx 17 payments of PPI (forget the loan amount at this point), so in your case:
17 payments divide that by Refund amount of £3220.35, your monthly PPI premiums were approx £189.43 a month, so x (times) that by 17 payments = £3220.31 (the few extra pence on yours).

When you settled the loan, the amount taken off the PPI on early settlement (which they call a rebate not a refund) was that of: £1887.12

So 3220.31 - 1887 (rebate already reduced on settlement) = £1333.19. It attracted interest each month, so interest on top = 1333.19 + interest of 305.68 = £1638.87 + 8% interest of £1256.50
totals at = £2895 and the odds.

Hope that makes sense :-)
Think I got that right x

[di30]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

To make it more clear for you........

The details of a breakdown they sent you (Refund of PPI)

Total PPI premiums paid: £3220.35
Plus interest on premiums paid: £305.68
Plus 8% interest: £1256.50
Subtotal: £4782.53
Less any previous rebate: £1887.12
Total award of compensation: £2895.41


You made 17 payments.

So if you divide the top figure £3220.35 by 17 monthly payments = £189.43.
They added on the interest it attracted each month @ £305.68
Plus 8% interest is added @ £1256.50.
Totals of all above = £4782.53.

Early settlement they reduced the settlement amount by reducing PPI amount not used @ £1887.12

So £4782.53 - £1887.12 = gives you a refund of £2895.41.

Is that a little more clearer for you? ;-)

[figgydoody]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

Hi Di,

Thank you for your encouraging words, but when it comes to maths and calculations, I'm afraid I really am a hopeless case!lol

There were actually only 14pmts on the loan, I think the reason they mentioned 17mnths when rejecting my original complaint is because there was a time delay between when I applied for the loan and when I returned the signed documents to take out the loan. There was also one returned pmt, so this may have had a negative effect on the loan, I'm thinking a penalty charge possibly?

What I am puzzling over is whether their calculations are correct, for example:

Re the interest paid on the premiums, what interest rate have they used to calculate the amount? Also, what period of time has the interest been calculated over?

Re the 8% statutory interest, what period has this sum been calculated over?

Re the rebate, I am sure I read somewhere a long time ago that when calculating rebates, Banks were using a method that operates unfairly against consumers. I can't recall the exact details, which is rather frustrating! But as we all know banks will try and get away with paying you less than you are actually owed!

So these are my issues with their offer, and I want to be absolutely certain they don't screw me over! But I'm at something of a disadvantage given my allergic reaction to all things maths!lol

Kind regards,


Figgydoody.

[Bill-K]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

Hi FD - and well done Di for your help so far. As usual, they don't give much detail when making their offers of redress, but I think we can arrive at some fairly accurate figures if you can supply the following:

1. Do you have copies of statements of account ?
2. Were 14 repayments actually made ? Or was it just 13 eventually - with one of them having been returned or 'bounced.' ?
3. Were any penalties charged to the account ? If so, how much, what for, and when ?
4. When was the account settled ?
5. Were any amounts credited to the account on settlement ? If so, what were they listed as, and how much ?
6. What was the final amount you paid in settlement of the account ?
7. Did you receive any cheque or bank credit as a 'PPI Settlement Rebate' ?

I can then put this info into a spreadsheet, which will calculate the redress due to you more accurately.

The interest on the premiums is usually at the same rate as the rest of the loan. We use an 'apportionment' method in our calculations, which doesn't need to use interest rates.

The 8% interest is charged on each PPI premium paid (which includes an 'apportioned' amount of account interest) - from the date of the repayment to the settlement date.

The older method of calculating early repayment figures was known as the 'Rule of 78' method. Recently, an arguably fairer method has been in use - known as the 'Actuarial' method.

[Turboman]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

Further to my colleagues help by di30 & Bill-k

Any chance we can see the Settlement Letters (edited of course) and the most recent correspondence so we can peruse the actual phrases used within the correspondence>

[figgydoody]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

Many thanks Di, Bill and Turboman for all your help so far, I am very grateful.

Re the questions you have asked Bill, I have quite a bit of p/work as I did a DPA request before the complaint was made (if memory serves) for both info on the loan and also a credit card with them, which they also rejected as a PPI complaint at the same time as the loan. They haven't written to me about the credit card, that's probably because the amount of PPI plus interest is likely to be much higher!lol

Anyway, I digress, the point is I am pretty sure I don't have all the answers to the questions you've posed in the info they've supplied, so if that is indeed the case I need to raise these questions in a letter to them. Are there any other questions/issues I should raise with them you can think of?

Would it be reasonable to expect them to calculate the full amount owed using the fairer method of calculation, rather than the 'Rule of 78' method, given the rebate provided at the time was on the basis of the PPI being unlawfully added?

Regards,

Figgydoody.

[figgydoody]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

Hi Bill,

I did notice on the offer letter they stated that it was their 'final response', and I seem to recall reading a thread were you had referred to the FSA handbook as someone else had received a similar response. Which section(s) of the handbook should I look at to include? It can hardly be reasonable or fair that they are effectively trying to block any dialogue, particularly when they have been less than forthcoming with the breakdown of figures provided!

Figgydoody.

[Bill-K]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

Max Respect for sending a DSAR before commencing the claim, FD. That should have provided you with the answers to my questions - and if it didn't - then they have failed both you and the ICO, it seems. I know it can be difficult to understand all the stuff that we get back from a DSAR - but the statements should be pretty straightforward. If you don't have these right up until account settlement, then this needs to be chased up.
Unfortunately, we cannot disseminate your DSAR data for you - we can only try and help.

It might help if you can get them to state which method they used to calculate your settlement figure, and the resultant PPI Rebate (if given). My learnéd colleague Turbo is a whizz at settlement calcs, and may be able to help with that. I think he will need a date of calculation for that.

When they mark a response as their 'Final response,' then that gives you leave to refer the claim to the FOS. However, they are doing this all too readily these days, IMO - and I think if their initial offer is their 'Final Response,' then they are taking the mickey, and we should engage them in further dialogue. Their reluctance to engage can then be seen as a further reason to show that they are being unreasonable.

[figgydoody]

Re: PPI Settlement Offer from Egg but unsure if their calculations are correct!!

Thanks Bill, for that lovely positive comment about sending the DPA request, much appreciated! I haven't had time to go through all the p/work yet, to see if they have sent all the relevant stuff, but my gut feeling is they haven't.

I do need to sort this matter out as soon as I can, as well as the credit card, as things are very tight financially, and it is through my own ill health and my Mum's (who I look after) that I didn't follow this up back in 2008 when they rejected the claim. My Mum has lots of PPI that has been added to loans and credit cards over the years, that shouldn't have been added, as she has long term health problems that pre-date these credit agreements. And like many people, she thought PPI was compulsory, and in some cases wasn't even told it had been added!!

I will go through my p/work this weekend to see what they've provided, but I really must sort out my Mum's stuff too, as she is really struggling.

Thank you for all your help so far, I am so grateful.


Figgy.xx