Waxsyd vs Nemo - PPI help & info needed

[Waxsyd]

Hi All

I've done a fair amount of reading through these threads re PPI and would very much appreciate any help & advice from anybody re my situation.

I rather stupidly took out a loan from Nemo Personal Finance, secured against my property, back in March 2006. I initially requested to borrow £41K, was turned down but offered £40k at a higher interest rate and told I needed PPI to get loan. I agreed! All this was done over the phone.

My copy of credit agreement reads:

'Secured by a legal charge or standard security (Non Regulated)

Cash Loan Amount £40,000, PPI £9,900 , total loan £49,900.
Monthly Int Rate (variable) 0.8310%, APR (assumes no variation in rate) 10.4%.'

Regarding PPI it states:

'Assuming you keep to the term of the agreement and that interest rates do not vary, this interest would be £16201.44. The total price you would pay for cover is £26,101.44, this will however change if interest rates change.'

Well the interest rate has now increased to 10.972% so guess this has too. My total monthly payment is just short of £500.

Obviously it states on the credit agreement 'Optional Payment Protection Premium', but in my case I dont believe it was optional. I wouldn't agree to a premium of nearly £10k (one quarter of the loan amount) for this type of cover. £26K (over half the loan amount including interest). But unfortunately I guess I did by not cancelling within the 30 day period. I did speak to them a little while ago and was told that if I cancelled the policy my monthly payment would only slightly decrease. I think the documentation states that I would only get around 13% of the total premium back.

So my questions are:

1. Is this mis-selling as it didn't appear to be optional in my case?

2. Should interest be added to the premium amount, if so, isn't this a little high?

3. What does the 'Non Regulated' bit mean?

I really hope that someone can give me a bit of guidance on this. The £500 every month is hard to make and a reduction would be of so much help.

Wax

[buggerlugs1]

Morning Waxsyd

As far as I can ascertain it is not illegal for a financial instituaion to make taking their PPI a condition of giving you a loan. However, if they do this, then the premium for the PPI should be included in the total charge for credit and thereby the APR. From what you have said, it appears that Nemo have added the PPI premium to the loan advance which is incorrect. The same thing happened to me, the loan company (GE Crapital in my case) said I couldn't have a loan unless I took their PPI, but they didn't tell me they were going to charge the full premium up-front and that I would then be paying interest on it aswell. From what you have written, I would say that yes, the PPI was mis-sold.

The 'Non regulated' phrase appears because your loan was for over £25,000 and the Consumer Credit Act only applies to loans of up to £25k. I'm not sure how that effects you legally, perhaps someone with more legal knowledge can answer that one.

As your loan was only taken out last year, it should fall under the remit of the Financial Ombudsman Service (FOS), Financial Ombudsman Service. If I were you I would try complaining to them prior to any court action, as their service is free, but before you do anything, make sure you have a good read around on the Consumer Action Group website.

Best of luck,
buggerlugs

[Waxsyd]

Hi Buggerlugs

Thanks very much for taking time to read my post and for your input.

I'm at very early stages with this and at this point I haven't written to anybody yet. I just want to see if I may have a case. I'll do a bit more reading around the other threads but would appreciate any extra info anyone else who reads may be able to offer.

Thanks again

Waxsyd

[Waxsyd]

Well, read quite a bit now and I'll take one step at a time.

So firstly I need to write and cancel the policy and see what happens from then.

Ta again

[Waxsyd]

Found the booklet I received re the PPI which says that if I wish to cancel the policy prior to its natural 60 month term, I will be entitled to receive a refund of premium, which will not be a proportionate amount of the premium I originally paid.

The refund amount would be credited to my agreement and my monthly repayment would be recalculated. It states that after 12 repayments a 13% refund applies and after 24 repayments an 8% refund applies.

I'm rather confused really. I'm about to cancel the policy, if they'll let me, and then go for the mis-selling route etc as In my case it wasn't given as an option. Would the total PPI amount (£9.9k) be taken off the total loan and then the monthly repayments recalculated or would I receive the PPI premium back (lump sum).

Obviously a 13% refund is very poor.

Sorry if I appear a bit thick on this, I feel a bit out of my depth with this one.

Hope someone can give me some good advice, thanks in advance ....... anyone!!!!

[buggerlugs1]

The FSA have recently issued guidance about the issue of nil or token refunds of PPI premiums: Payment protection insurance (PPI) – Refunds of single premiums : FSA Money made clear – Unfair contracts. Basically they are of the opinion that the companies should give a fair refund.

Best regards,
buggerlugs

[Waxsyd]

Hi Buggerlugs

Thanks again for your input.

After reading through the FSA articles I feel I understand a bit more now so first things first I'll write to cancel the policy.

I'll keep you updated of my progress if that's ok?

Waxsyd

[di0430]

Hi and sorry to hear of your problems with 'Nemo'.

We have our complaint about Nemo in with the financial ombudsman at present due to us being mis sold a ppi policy.
We were told we had to take their recommended cover and as you know it is very costly, we even told them we can get a cheaper cover option else where, but they were not having it, and they left us with know choice.
I am wondering 'it wasn't a Sarah' you spoke to is it ??

If you want to know more - please get back to me.........I have lots to say about this company, this complaint has been with the ombudsman since last October and you also had a choice too, you didn't have to take their cover, so in my opinion this was mis sold to you.

Luckily we have recordings, so you should do to, so if you are going through a complaint with them and with no success, please ask for the disk so that you have this to take this further.
Unfortunately on some recordings some bits of conversation seems to have been erased, but the caseworker did pick up during the conversation where this was pushed on to us, should be the same for you too.

Good luck and please get back to me, thank you I look forward to hearing from you - please don't leave it there.............its your money and your choice

Cheers Di xx

[Waxsyd]

Hi

Have now had confirmation of cancellation from Nemo who state that they will refund just over 1K back to the account and knock it off the balance! This will reduce the monthly payments down by about £18.50 which funnily enough is the exact amount I was paying before a recent percentage increase. I thought I may be due to get more than 1K back. Is it correct that it should just come off the whole balance?

I have not been asked to take out a new loan or sign a new credit agreement etc.

So I think now I should get a S.A.R and take it from there.

Any input would be greatly appreciated

Ta