PPI offer but most going to the DCA! Can we fight it?

[carlsberg89]

I did some research a few years ago on another forum, gained some insight into Credit card debt, followed advice and submitted a SARS letter. We have been hammered by phone and letter by DCA's but have toughed it out to be halfway towards getting the debts statute barred. H*BC had a couple of these loans which were in dispute which they sold to MKDP LLP in March. H*BC wrote recently to inform us that our complaint of PPI mis selling had been upheld on these loans. The net effect is that we have an offer of £13000 which H*BC will paid to the DCA and not to my partner. £110000 of compensation will be going to a company that my partner has never had any dealings with. Has anyone any experience with this? I read something on these forums late last night that there maybe an issue of fraud associated with paying compensation to a DCA. Can anyone advise? Thanks in advance. Hope that made sence

[labman]

Re: PPI offer but most going to the DCA! Can we fight it?

It is a very complex area and you are right to be concerned. Unfortunately, when a debt with ppi is assigned in absolute (sold) to a DCA for say 15p in the £1.00, if a ppi claim is then made, there is a clause in the Deed of Assignment (a confidential document between seller and buyer of the debt, so you'll never see it) which permits them to sell it back to the OC again. The OC then apportions the ppi to the debt owing, then resells the debt back to the DCA again. It is all very nicely stitched up.

One or two institutions will pay the money direct to the debtors (as should be the case) which further muddies the water. What do you do about it? Short of spending a fortune establishing the legitimacy of this through the courts, I don't think there's a lot you can do.

I know there is another forum that is looking at this particular area. If you pm Bill-K, he will give you details.

[Bill-K]

Re: PPI offer but most going to the DCA! Can we fight it?

Hi Carlsberg.

An associate forum, Penalty Action Group, has been looking into some of the more difficult aspects of PPI reclaims, and Legal Beagles has been good enough to team up with them in that respect. Fraud is always a tough one to ultimately pursue legally - but fraudulent activity seems rife in the field of PPI generally.

You might find PAG of use if you are looking at a PPI claim that is "non-standard" - and yours seems like a candidate. By all means PM me if you're interested in checking out the possibilities of "The Lesser-Trod Path."

[Bill-K]

Re: PPI offer but most going to the DCA! Can we fight it?

As Labman says, the creditor has the right to offset any PPI redress against any arrears owing to them. If you can successfully dispute that these arrears are now recoverable, then you should be paid the redress directly - but I doubt that this is something you will find easy to do - if it is at all possible. If the arrears are due on accounts which you have any responsibility for, then I believe you can be held responsible for the total amount - even if the account is/was in joint names. I believe it is termed as 'joint and several liability.'

However, if you are being paid Compensatory Interest (usually at the Statutory rate of 8% p.a. simple interest) - then you should be entitled to have this paid to you directly - along with any additional compensation (which the FOS may order - or which the lender may volunteer to offer).

A further aspect which we are looking into in PAG is that of 'consequential losses' - and this is the less-trod path I have mentioned. This is based on the idea that the FSA rules state that - where possible - the claimant should be put into the position they would have been if the PPI had not been mis-sold. Therefore, if they suffered any losses in addition to the PPI premiums and account interest - then this should be compensated for in addition to the actual PPI redress, if it can be shown to be a consequence of the PPI mis-selling.

But this is as yet untested. If we use the FOS route, then there should be no risk of any costs to the claimant - but it will probably be quite a long battle.

[FORCEOFONE]

Re: PPI offer but most going to the DCA! Can we fight it?

If the ppi element that is being refunded to a collection agency, should it not be paid back at contractual interest rather than 8%

The whole idea of a PPI reclaim is to put the borrower back into the same position as though he had not taken out a loan

If it is at 8 % rather than contractual interest, then if still indebted to the collection agency, the debtor will still indebted to the collection agency and is then put at a disadvantage

Just throwing my own ideas on this

[labman]

Re: PPI offer but most going to the DCA! Can we fight it?

If it is at 8 % rather than contractual interest, then if still indebted to the collection agency, the debtor will still indebted to the collection agency and is then put at a disadvantage

Why? Sorry - Maths is not my strong point, but I fail to see why they would be disadvantaged. Could you explain in layman's terms please?

[Bill-K]

Re: PPI offer but most going to the DCA! Can we fight it?

Replying in blue, if I may...

If the ppi element that is being refunded to a collection agency, should it not be paid back at contractual interest rather than 8%
As per the FSA rules (PS 10/12), the PPI premiums are refunded, along with the apportioned account interest charged on the cumulative totals. This is at the contractual rate - whatever it was at any time.

Compensatory interest is then added to this - where appropriate - at the Statutory rate of 8% simple interest.

To argue that any higher rate of compensatory interest should apply would entail court proceedings, as this then goes beyond the scope of the FSA/FCA rules, and in doing so loses the claimant any protection therefrom, and renders them potentially liable for costs. That's not something I would recommend - nor something that I would expect a sane NWNF lawyer to take on.
The whole idea of a PPI reclaim is to put the borrower back into the same position as though he had not taken out a loan
Not quite - it is to put the claimant back into the same position as though he had not taken out the mis-sold PPI on the loan. The loan itself is not normally in dispute simply because we are reclaiming mis-sold PPI - and I think we need to be very clear on this. This is not an unenforceability issue, FOO.
If it is at 8 % rather than contractual interest, then if still indebted to the collection agency, the debtor will still indebted to the collection agency and is then put at a disadvantage
Hopefully the above answers this.
Just throwing my own ideas on this
And many thanks for that, FOO.
Do have a read of Turbo's excellent explanation of the mechanics of PPI calculations here. It's 'work-in-progress,' but should help with this...

http://www.legalbeagles.info/forums/...I-Calculations

....

[FORCEOFONE]

Re: PPI offer but most going to the DCA! Can we fight it?

Thanks bill

If compensatory payment with interest is added on top of the 8%, to bring any settlement up to the level of contractual interest, then that will be a fair settlement

Why is this procedure not commonly known? i have always been under the impression it was just 8 %

But educated now

[Bill-K]

Re: PPI offer but most going to the DCA! Can we fight it?

No, FOO - the redress consists of 3 basic elements:
1. The PPI premiums paid;
2. The apportioned account interest which is directly attributable to the cumulative total of PPI premiums;
3. Compensatory interest at the Statutory rate of 8% on BOTH the above (subject to FSA provisions).

On occasions, the FOS may also award further compensation for distress where a lender has acted unreasonably, and this is in the form of a 'lump-sum' award.

This is fairly common knowledge in the area of reclaiming as far as I am aware, as it has been the method used for years - but I'm just a maths geek, and they don't let me out much. Do have a read of Turbo's excellent explanation, though. It's contained in the FSA guidelines on PPI Redress contained in Policy Statement PS 10/12. Appendices 1 (DISP APP 3) & 2 (Worked Examples).

[carlsberg89]

Re: PPI offer but most going to the DCA! Can we fight it?

just a quick thought. Could I make the DCA (Now the owner of the debt) an offer of say 30p in the pound of the debt in final settlement (Should be circa £3.5K) If they agree then pursue HSBC for the full PPI mis selling amount which they have agreed is circa £14k. We would be then £10.5k better off rather than the £2.5k as it stands. Are the DCA likely to be aware of the offer made by HSBC? Anyone else done this? Could it work or am I being too optimistic?

[dogtired]

Re: PPI offer but most going to the DCA! Can we fight it?

As Bill knows I have problems with PPI on THREE accounts all through HBOS.
Two paid directly to me, one of which Cabot are still trying to chase, despite the Bank saying it is now paid off.
One of the others was, again, Cabot and HBOS and I got about £40 Cabot got the rest.
Yet another this time passed to three different agencys where the bank first said it was settled and I got the full amount and they three months down the line tried to say there was still sums owing AND paid a CCA fee into the dispuuted account.
So its never simple is it?:tinysmile_hmm_t2:

[Bill-K]

Re: PPI offer but most going to the DCA! Can we fight it?

I'm not sure exactly how the mechanics of it work, but the DCA may have bought the debt from the OC - or it may simple be appointed to collect the debt for a commission. If it has bought the debt, then it will be in a position to negotiate a reduced settlement, but not if it is simply acting as a collection agent.

However - where a PPI claim has been made, this has to be referred to the OC, as it will have been the OC who was responsible for the mis-selling, and who originally charged the premium(s) and account interest on that. The DCA will - I believe - be aware of this, as the OC would usually have to 'buy back' the debt, re-schedule it, and then re-sell it to the DCA at an even lower amount than it was originally sold for. So - I wouldn't hold out much hope that the DCA will be able to negotiate to a lower settlement, as I believe the debt is back under the ownership of the OC, who will be using the PPI to reduce the arrears on it before re-selling it to the DCA.

I must emphasise that this is simply my belief as to how the system works, and I would be happy to learn from anyone who can confirm or correct my belief.

[carlsberg89]

Re: PPI offer but most going to the DCA! Can we fight it?

Gosh this isn't easy is it. I wonder what peoples thoughts are on negotiating with the DCA. Cant say they are my favourite people if im honest. Worth a go or just opening up a whole new can of worms? on the PPI compensation acceptance form it shows that in excess of £11k will go to the DCA by paying into their account which just happens to be with HSBC! lol. The remainder will go to my partners nominated account. I find it all just a little cosy. How the heck does anyone know how the settlement figure is calculated? Any thoughts would be appreciated

[Bill-K]

Re: PPI offer but most going to the DCA! Can we fight it?

I agree that these arrangements all seem to be somewhat 'cosy,' as you say, C89. Hong Kong & Shanghai may be some distance from the concrete cows of Milton Keynes, but in these days of the 'global village,' I daresay they are bedfellows.

Although I didn't give you much hope in my previous post, I can't see that negotiating with the DCA should lose you anything other than time and stationery - so why not give it a go ? The worst case scenario seems to be that you'll be out-of-pocket for whatever settlement you might agree on with them, while having to slog out with HSBC over the balance of the PPI redress.

The lenders are notoriously coy about disclosing their calculations. The FCA/FSA have published a set of rules, however, and these show how PPI redress SHOULD be calculated. We have spreadsheet/calculator programs here which can calculate this redress in line with the FSA rules, but these need you to input your own data, which is not always possible.

If you have that data, then you can calculate your expectations. If not, then you MAY be able to get it by sending a Data Subject Access Request (DSAR). Also - you could probably buy some more time by asking HSBC for a more detailed explanation of their calculations, and explaining to them that you will obviously need more time and information than they have given you in order to be able to make an informed decision on whether to accept their offer.