you'll need all the statements via an SAR to the Original Creditor & ideally a copy of the Loan Agreement

you'll need to fill in a copy of the statint.xls spreadsheet HERE

you'll need to fill in the FOS Customer Questionnaire HERE

you'll need a covering letter HERE

all three go to whatever you are reclaiming PPI From..

that could be the original creditor or the underwriters of the PPI Insurance policy

this depends upon dates and other variables.

** Thank you to ims21 for providing the following Q & A in respect of Single Premium PPI **

SINGLE PREMIUM LOAN PPI

There have been a lot of questions of late regarding PPI claims on Single Premium PPI Policies and it is clear that there is a lot of confusion out there as to what they are, how they work and what can be claimed back.

This article is intended to give some detail as to how to deal with Single Premium PPI Policies in order that claimants have an understanding of their potential claim.

This article does not discuss variable PPI premiums which feature on credit cards or other revolving credit accounts.

This article is not an interest tutorial, the interest tutorial can be found elsewhere on the site.

What is a Single Premium Policy?

A single premium policy is one where the premium for the insurance is paid to the insurer as a lump sum at the start of a loan agreement. In order to make that payment to the insurer, the bank loan you the money to pay that premium and add it to your requested loan amount.

For example, you approach the bank for a loan of £5,000. The bank tells you that there will be a PPI premium in the sum of £500 and they lend you that money as well. So all of a sudden your total loan with the bank is not just the £5,000 you wanted but it has increased by £500 to cover the PPI premium. So your loan agreement with them is now £5,500

Now the bank are not going to lend you that extra £500 for nothing, they are going to charge you interest on that amount as well as interest on your original loan amount of £5,000. So not only have you “bought” a PPI policy but the bank is going to make money by way of the interest they charge you on this extra £500 loan.

Suppose your agreed term for repaying the loan is 5 years (60 months). Well, it is going to take you 5 years to pay off that £500 extra loan because the PPI loan runs for the same period of time as the “normal” loan so each of the monthly repayments you make contains a contribution towards the PPI part of the loan.

If the agreed term of your loan is, say, 10 years, then it is going to take you ten years to pay off that PPI loan.

My PPI policy says it covers me for five years from the start of my loan so I’ve only paid PPI for five years.

That would only be the case if your loan ran for a period of five years. If your loan was for a period greater than five years then you are still paying for your PPI loan for as long as the loan runs. However you are no longer covered by the PPI after the five year cover period expires.

I’ve seen TV adverts that say you can claim back if you have taken out a loan in the last six years. My loan was taken out 8 years ago so I can’t claim.

Wrong. There is no time limit as such for reclaiming mis-sold PPI. The reason that these TV companies promote the six year time limit is that it is an easy option for them. They do not want to be bothered with the technicalities of older claims. They are in business to make a quick buck so they go for the easier claims and for the privilege of doing so they will charge 25% to 30% or more of your winnings in fees. My personal view is steer clear of them as they will do nothing that you can’t do yourself for free.

I’ve seen mention of preparing a Schedule of Claim or Schedule of Charges (SOC). Why do I need to do that when my lender should work out the figures?

Well you can of course let the bank do the calculations. But do you really trust your bank? How will you know whether any offer they make you is accurate? How will you know whether you are being treated fairly? It is apparent from the forums that most people no longer have any trust in the financial institutions following the fiascos of unlawful bank charges, credit card charges and the scandal of mis-selling PPI.

Claimants would do well to prepare calculations of their own and submit a copy when making the claim as it shows the lender that you have researched your claim and have a certain understanding of what should be.

I’ve seen mention of the fos consumer questionnaire. My bank has sent me their own questionnaire so I don’t need the fos one.

Again this will come down to a matter of trust. If you trust your bank then you can complete their questionnaire. My personal view is to use the fos version as it was devised to cover all types of claim for all institutions. There is no guarantee that the one your bank sends you has not been altered in such a way that the wording of the questions is “loaded” in favour of the bank.

Do I actually need to complete a questionnaire? Can’t I just send in a letter to claim?

The simple answer is that you don’t need to complete a questionnaire…it is not compulsory but will probably speed up proceedings. Also, if a questionnaire is not completed, most banks will send one out to you anyway. It is better to go for a “belt and braces” approach ad so the initial approach to the bank should comprise a Schedule of Claim (see above), a completed questionnaire and a covering letter outlining the reasons why you believe you were mis-sold the PPI.

I’ve been diligent and kept all of my statements and I have the original loan agreement. What other information do I need from my bank?

Simply put, nothing. If you have your loan agreement and all of the relevant statements you are in possession of all you need to prepare your schedule of claim and submit your claim to the bank.

Unfortunately the dog has eaten my agreement and my statements. I don’t even know if I had PPI on my loan. What should I do?

In this case you would need to send a Subject Access Request (SAR) to your bank to obtain all information they hold. You may also need to do a CCA request to get a copy of the agreement. There is plenty of information in the forums about SAR and CCA requests and these are beyond the scope of this article.

However, from the information you receive back, it should be possible to establish whether PPI was included in your loan and should also yield copy statements and/or transaction history. From this information you will be able to prepare your Schedule of Claim (see above).

My loan did have a Single Premium PPI included so what do I claim?

Basically you claim back what you have actually paid out for the PPI, including the interest the bank charged on the PPI part of the loan plus further interest as compensation.

In respect of your interest claim, what interest level you claim will depend on which route you intend to follow to get your money back.

The initial approach is always to the lender but if they fail to uphold your claim there are two routes open to you.

You can pass the case over to fos or you can sue in court.

Fos would award a refund of all PPI payments paid, the interest charged on those payments by the bank plus 8% statutory interest on each of the payments.

With the court route you open the door to being able to claim higher rates of interest in restitution which again is beyond the scope of this article.

Claimants would do well to read the CAG Interest Tutorial for more detailed information on interest.

My loan was for £8,000 and the bank added PPI of £626 so my total loan was £8,626. My repayments were £363 per month. How do I know what the payment relating to PPI was?

You simply use percentages to work out what the amount of PPI repayment was. In this case the formula is £626 divided by £8,626 and the result multiplied by 100. (626/8,626 x 100) = 7.26%.

So we now know that your PPI was 7.26% of the total loan. Accordingly 7.26% of each of the monthly repayments was for the PPI part of the loan and 7.26% of £363 is £26.35. So each month you were paying £26.35 towards the PPI loan.

You then use the spreadsheet to calculate your claim. See later for details on the spreadsheet

My loan included Single Premium PPI and I paid the loan off early with a lump sum payment. I didn’t get any rebate on the PPI.

In this case you would still have paid the total PPI premium which was put on your loan to start with. For the monthly payment up to the date of settlement you work out the percentage of PPI on a monthly basis as described above. When you settled the loan with a lump sum, the same percentage is used to find out how much of that settlement figure was for the PPI part of the loan. You enter this final amount of PPI payment as the final item in your spreadsheet list.

See later for details on the spreadsheet.

My loan included Single Premium PPI but I cancelled the policy part way through and I got a rebate of PPI when I cancelled. What do I claim back?

Ok, this is where it starts to get a bit complex (I prefer to call it interesting). This is another area where the bank can make some money out of you.

When dealing with a PPI claim, it is rare that a rebate on the premium is actually the right amount of rebate and in general we find that when the rebate is given, it is less than should be the case.

We must bear in mind that with a reclaim of PPI, the idea is to put you back in the position you would have been in had the PPI not been applied in the first place and to compensate you for the payments you have made against a mis-sold product.

So this calculation is a multi-stage process.

First of all you calculate the percentage of the monthly payments you made towards the PPI part of the loan as described above.

For the payments you actually make, you enter these in the spreadsheet as normal.

Now we need to find out whether we have been overcharged for the PPI part of the loan when the rebate was given. To do this we need to be able to calculate what the balance on the PPI loan was at the date it was cancelled and compare that to the rebate given.

Luckily there is a spreadsheet that can do that for you.

Simply enter the requested information where indicated and it will work out a close approximation as to the balance on the PPI part of the loan at the date of rebate.

So let us suppose that the spreadsheet calculates that the balance of the PPI part of the loan was £1,000. Let us further suppose that the rebate given was £800. Take one from the other and you have been overcharged by £200.

Now this £200 remains in the main loan balance when it should have been written out of the loan at the point of rebate.

So the final entry in the spreadsheet of claim should be £200 and the date of that entry should be the date of the rebate. This then ensures that you are compensated for interest on that £200 from the date of rebate right up until now.

I had a loan which included a Single Premium PPI. It was initially an 8 year loan. After 6 years I took out another loan which gave me some cash in my pocket and also paid off the balance on my previous loan. The second loan also had PPI included and the term of this new loan was 10 years. What do I claim?

This is another scenario where the banks can make more money from you, the unsuspecting “customer”. (Sometimes referred to as the victim).

We already know that if you had stuck with loan 1, your PPI part of the loan would have run for 8 years because it was included in the main loan. But you have effectively taken the balance on that loan after six years and transferred it into a new loan. Accordingly part of the balance transferred or “rolled over” into the second loan would have included the balance on the PPI part of loan 1. That balance would be paid off over the term of loan 2.

To see how the advantage is with the bank, consider this.

Your original loan was for 8 years so you would have originally have been paying the PPI part of the loan for that period. You refinance after 6 years and let us suppose that a sum of, say £400 being the PPI balance on the old loan, is rolled into loan 2.

Now the term of loan 2 is 10 years. So that balance of £400 is now being paid off over a period of ten years. And for those ten years you will be paying interest on that rolled over amount. Had you stuck with loan 1 only, then that £400 would have been paid off over only two years. You can see that this is a tidy profit for the bank.

And of course you have PPI on loan 2 as well and you’re paying that PPI off over a period of 10 years as well.

If we look a bit deeper, the PPI cover on loan 2 was actually covering you for some PPI on loan 1. So you have been sold PPI to cover PPI. What’s that all about then?

So who is the winner? It certainly isn’t you so I wonder who it could be?

So what about the calculation of the refund that is due?

First off you calculate the percentage of PPI which is included in the first loan as described above.

Second, we have to find out what the balance of the PPI part of loan 1 was when it was rolled into loan 2. That can be done using the loan progression spreadsheet.

Third, we have to express that balance as a percentage of the total of loan 2.

Fourth, we need establish the percentage of loan 2 that relates to the loan 2 PPI.

Then we need to enter the data into the spreadsheet.

This scenario is probably best explained using an example.

Let us suppose that we have established that loan 1 had a PPI percentage of 7.75% of the total of loan 1.

Let us say that we have worked out (or the bank have told us) that the balance on loan 1 at the time of refinancing is £1,500. We now know that 7.75% of that £1,500 is the PPI part of loan 1. 7.75% of £1,500 is £116.25 which is the amount of PPI rolled into loan 2.

Now let us suppose that loan 2 was for a total amount (including the PPI on loan 2) of £5,000 and that the loan 2 PPI premium included in that was £600.

The percentage of loan 1 PPI included in loan 2 is given by £116.25/£5,000 x 100 = 2.33%. So for every repayment you make on loan 2, a sum equivalent to 2.33% of it relates to PPI on loan 1.

Now we also now that of the £5,000 for loan 2, that included a PPI premium of £600, so loan 2 PPI percentage is £600/£5,000 x 100 = 12%. That means that for every repayment we make on loan 2, an amount of 2.33% of it is going to loan 1 PPI rolled over and an amount of 12% of it is paying the PPI on loan 2.

So to enter this in the spreadsheet you list the actual payments made for PPI on loan 1 prior to refinancing. From then on you list the 2.33% of each payment and annotate it as Loan 1 PPI and then you list the 12% of each payment which relates to the PPI on loan 2.

I had a loan that was refinanced into another loan and both of them had PPI included. However, some months into loan 2 I woke up to the PPI scandal and cancelled the PPI and got a rebate. What do I claim?

This is just a combination of the principles discussed above. You need to work out percentages of the PPI for loans 1 and 2 and account for the monthly repayments as previously discussed.

You also need to work out the balance of loan 2 (total, not just the PPI part) at the time of rebate using the loan progression spreadsheet.

Apply the percentages for loan 1 PPI and loan 2 PPI to that balance to find out what the PPI total outstanding was at the time of rebate. Compare that total to the amount of rebate given to establish the overpayment of PPI.

The details of the principles involved are discussed earlier on.

I had three loans, all started at different times and all three had PPI on them. I consolidated the three loans into one big loan to try and reduce monthly outgoings. I declined PPI on this consolidation loan. What do I claim?

This scenario does crop up from time to time. If you have read this article you will be more familiar with the logic involved.

First you need to work out the balances on each of the accounts which were refinanced at the time that event occurred.

You then need to work out what percentage of each of these loans was for PPI. (see above)

Apply that percentage to the respective balances and you will have the amount of PPI balance rolled into the consolidation loan.

For example, let’s say that the PPI balances on loans 1, 2 and 3 were £650, £900 and £1,150 respectively at the time of refinancing. Let’s also say that the consolidation loan was for a total of £20,000.

The percentage of loan 1 PPI included in that amount is 650/20,000 x 100 = 3.25%.

The percentage of loan 2 PPI included in the consolidation loan is 900/20,000 x 100 = 4.5%.

The percentage of loan 3 PPI included in the consolidation loan is 1,150/20,000 x 100 = 5.75%.

So if your monthly repayment on the consolidation loan is, say £300 then 3.25% of that is for loan 1 PPI, 4.5% of that is for loan 2 PPI and 5.75% of that is for loan 3 PPI. The figures are £9.75, £13.50 and £17.25 respectively.

I had an eight year loan which included PPI. 1 year into the loan I lost my job and could not keep up the repayments and so I successfully claimed on the policy and it paid my repayments for a period of 6 months. I then found a new job and picked up the repayments myself from then on. Can I claim and what do I claim?

If the PPI was mis-sold you can still reclaim. What you really need to do is quantify the potential claim using the above principles and then deduct any payout which was made under the policy. If the amount paid out by the policy exceeds the amount of your reclaim you should forget claiming.

If the amount being reclaimed is greater than the payout made, then you can continue to claim but you must deduct whatever the policy paid out from the total you are claiming.

This situation does crop up from time to time but you would be wise to ensure that you have good reasons for the mis-sale given that the policy has paid out.

I had PPI on my 5 year loan and 2 years into the loan I was made redundant. I didn’t claim on the policy as I have only just become aware that I had it. I have been paying small amounts against my loan, £50 per month to be exact but the normal monthly repayment was £350. Can I claim and what do I claim?

Yes you can claim if the policy was mis-sold.

All you need to bear in mind is that you can only claim back what you have paid out (plus the interest of course).

For all the time you were paying the normal instalment (£350) you claim the relevant percentage which you can work out as above.

For the time you were making reduced payments (£50) you claim the same percentage of those reduced payments.

I got behind with my loan which had PPI attached to it. As a result, the loan was sold to a Debt Collection Agency and I have a notice of assignment to that effect. As my debt has been sold, who do I now claim from and what do I claim.

This is an interesting one but you should revert to the logic that it was the original creditor or their agent who mis-sold the policy and therefore it is they who are your target for the reclaim.

Surprising as it may seem, the dca has nothing to do with the policy or the sale of it. All they have is a figure that they have bought. The claim is therefore to the original lender.

Now there is no set rule as to what goes on here but the closest logical approach is as follows.

Prior to selling the debt, the original lender would have issued default and termination notices. It is likely that from the date of termination no further interest will be added to the account. There would clearly be a balance on the account otherwise there would be nothing to sell on to a dca.

If you put yourself in the bank’s shoes what can they do about a claim that they uphold?

Normally they would adjust the loan balance for the unpaid part of the PPI, offset the claim against any arrears on the account and refund the balance to the claimant. As they have assigned all rights etc to the dca, they can no longer interfere with the balance on the account (generally speaking).

So what they have to do to put things right is to refund the entire premium to the claimant plus the interest they would have charged on the payments by the claimant and then plus interest on those payments by way of compensation, typically 8% statutory interest.

They do this in the logical approach that if the dca has a figure that has been sold to them, that figure would still include some of the PPI but the bank can’t touch that. By refunding the entire premium plus the appropriate interest, they are assuming that the claimant will use that refund to pay off the dca and the bank are giving you back more than you have actually paid in order to fund that.

Now whether the claimant has a dispute with the dca is beyond the scope of this article but this is a recent scenario that has cropped up and from the calculations we have been able to perform is an accurate representation as to what happened.

So in this scenario you would put forward a claim for the total amount of the PPI premium plus the interest charged by the bank on the payments actually made plus the further 8% statutory interest on each payment actually made.

I had a loan with PPI on it but part way through I hit hard times and agreed a brief repayment holiday with my bank. They kindly agreed to me not making any payments for 3 months and then pick up again from then on. This I adhered to and am continuing making payments today. Can I claim and what do I claim?

The first question is that if you knew you had PPI on the loan, why did you not claim against it when you fell on hard times?

Of course, if you were mis-sold, then you can claim.

You need to revert to the premise that you can only claim back what you have paid out. So if your repayments for PPI were £10 per month, you claim the £10 monthly payments plus interest up to the date of the holiday, you then claim nothing for the period where no payments were made and then you claim the £10 per month again from the date you started making the payments again.

I have a variable rate loan and PPI is included. I see a lot of threads about fixed rate loans but what is the position when the interest rate varies over time? I must have had six or seven rate changes over the years so how do I deal with this in my calculations.

In this scenario the position is no different from fixed rate loans. You still calculate the percentage of the PPI to the total borrowed. Let’s say that the PPI is 15% of the total loan.

As the interest rate changes, your monthly repayments change but the percentage of PPI contained within those repayments is always 15%. So all you do is take 15% of any monthly repayment you made and claim that amount back plus appropriate interest.

I have received copy statements/transaction history from my lender but they only go back six years. I know the loan was taken out two years prior to that but I have no details of payment dates for that period. I have received the figures from the loan agreement which shows the details of the loan and PPI. The lender insists that they do not have transaction history beyond six years. How do I work out my claim?

We won’t go into the detail of whether the bank is fobbing you off so let’s work with what we’ve got. From the details of the loan agreement you will know approximately when the loan was taken out.

It is usual (but not always the case) that repayments start one month after the advance. Armed with that information it is possible to get the repayment dates to within a day or two which is good enough for your claim calculations.

The other way of looking at it is to check what date the repayments went out on the statements you do have. If they went out on or around the 16th of each month, just project that back in time and prepare your schedule based on payments going out on that date each month.

Summary

In this article I have tried to cover the most common scenarios that crop up in the forums.

Please be aware that as regards interest calculations, the banks use complex algorithms to calculate interest and we cannot get 100% accuracy from our figures. We can however get to a good approximation and that is what we are after in order to submit a claim or challenge in court.

The spreadsheets aim to give a degree of accuracy that can be logically justified and will enable the claimant to compare any offer made with their own calculations and to take a view as to whether any offer is close to the actuality.

PLEASE NOTE THE FOLLOWING

1 This is not a discussion about interest

2 This is not a discussion about individual cases – they are discussed in the forums

3 This is not a discussion about time limits

4 This IS an article to explain some fundamental concepts in dealing with PPI claims and I hope that it gives the reader some understanding of the basic principles involved for various scenarios.

Help is always available in the main forums but if you have read this article then you should be a lot wiser into the workings of PPI claims and I hope it has answered some of your questions.

ims21

Spreadsheet 1 - Statutory interest @ 8%

[ATTACH]32296[/ATTACH]

Spreadsheet 2 - Loan progression analysis